How Are Meta’s Predictions Crashing Nasdaq 100?
The Nasdaq 100 futures fell on Thursday as Meta’s dismal prediction fueled concerns about a downturn in profitability. Still, losses were held back by expectations that the U.S. Federal Reserve would decrease the rate rise pace.
Meta Platforms Inc., the parent company of Facebook, dropped 21.7% in premarket trade. This erased over $75B from its market value as it had a decline in Q3 profit. Moreover, it anticipates a dismal Christmas period. Worries about increasing interest rates hurting economic development sparked by gloomy earnings and warnings from growth giants like Microsoft Corp (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) Inc caused the S&P 500 and the Nasdaq to end their three-day winning run on Wednesday.
Q3 Statistics Have Left Investors Disappointed
Head of investment analysis at AJ Bell, Laith Khalaf, said that Meta is now the biggest IT business to disappoint customers. Things are starting to seem a lot less bright.
Analysts have set a lower bar for the third-quarter reporting season, with total S&P 500 profits now expected to rise 2.3% from a year earlier, down from 4.5% at the start of the month, according to Refinitiv statistics. Hopes that the Fed could adopt a less aggressive stance at its December policy meeting have increased in response to the disappointing company reports. Moreover, much data points to a slowing economy.
Investors were waiting for the European Central Bank’s decision later on Thursday when the Bank of Canada issued a smaller-than-anticipated rate rise on Wednesday. Numerous encouraging profit reports caused the Dow to increase. Following the release of an increase in third-quarter earnings, Caterpillar Inc. (NYSE: CAT) saw a 4.2% increase, while McDonald’s Corp. (NYSE: MCD) saw a 2.9% increase after exceeding expectations for third-quarter comparable sales.
Merck & Co Inc increased by 2.5%, while Honeywell International Inc (NASDAQ: HON) increased by 5.2% as both businesses revealed third-quarter profits above expectations.
