Stock Market Today: Tech Falls On Microsoft, Meta

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Post on Nov 01, 2024

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Stock Market Today: Tech Falls on Microsoft, Meta Slump

The tech sector took a hit today, dragging the broader market down, as investors reacted to disappointing earnings reports from Microsoft and Meta.

Microsoft Misses Expectations, Cloud Growth Slows

Microsoft shares plunged over 4% after the company reported mixed quarterly results. While revenue came in slightly ahead of estimates, profit missed expectations due to slower growth in the cloud computing business.

Azure, Microsoft's cloud platform, saw revenue grow by 27% in the quarter, down from 32% in the previous quarter. This deceleration in cloud growth raised concerns about the company's future prospects.

Meta's Ad Revenue Weak, Stock Plunges

Meta, the parent company of Facebook, Instagram, and WhatsApp, also saw its stock price plummet over 10% in after-hours trading after reporting disappointing earnings.

Ad revenue came in below analysts' expectations, reflecting weakness in the digital advertising market. The company also faces mounting competition from other platforms like TikTok and Snapchat.

Broader Market Impact

The decline in tech giants like Microsoft and Meta weighed heavily on the Nasdaq Composite Index, which fell over 1%. The S&P 500 also closed lower, while the Dow Jones Industrial Average managed to eke out a small gain.

What to Watch for

The tech sector's performance is closely watched by investors as it is a major component of the overall market. The decline in tech giants today is a reminder that even the most dominant companies can face challenges.

Going forward, investors will be closely watching:

• Continued growth in cloud computing: The slowdown in Azure growth is a potential concern for the sector.
• Digital advertising spending: The weakness in Meta's ad revenue suggests that advertisers are becoming more cautious.
• Competition from other tech platforms: The rise of TikTok and other platforms is putting pressure on established players like Meta.

The coming weeks will be crucial for the tech sector as investors assess the long-term implications of these recent earnings reports.

Overall, the market is in a state of flux, with uncertainty surrounding the future direction of interest rates and economic growth. Investors are likely to remain cautious until they have a clearer picture of the economic landscape.