Stock market today: Stocks struggle after Meta, Microsoft results

Stocks fell early and remained in the red through Thursday's close, with the weight of unmet earnings expectations for several “Magnificent 7” stocks pushing major indexes into the red.

The data continues to show stabilization inflation and still healthy employment situations were encouraged Interest rates higher at the start of the session. However, the chances of a rate cut remain stable, a day ahead of the release of the October non-farm payrolls report.

In today's economic news, the Personal Consumption and Expenditure Price Index (PCE) rose 0.2% in September Office of Economic Analysisup from 0.1% in September, but in line with the consensus forecast.

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Core PCE, which excludes food and energy, rose 0.3%. Core PCE is the Federal Reserve's preferred measure of inflation.

The 2.1% year-on-year increase in total PCE was the lowest since February 2021 and below the 2.3% increase in August. Meanwhile, core PCE was stable at 2.7% on an annual basis.

The yield on the 10-year Treasury note rose nearly seven basis points intraday to 4.33% before settling virtually flat at 4.28%, even as the main benchmark rose nearly a full percentage point, or 100 basis points, in about a month .

The Fed fund futures market continues to reflect a greater than 90% chance that the central bank will cut its benchmark interest rate by a quarter of a percentage point during next week's Federal Open Market Committee meeting.

Employment and inflation

Complementing the PCE data, initial jobless claims for the week ended Oct. 26 were a seasonally adjusted 216,000, down 12,000 from the previous week's revised level, it said Ministry of Labor.

“The overall picture is that inflation continues to fall, albeit with some fluctuations (like in September),” he says Sonu Vargheseglobal macro strategist at Carson Group. “This report is unlikely to change expectations that the Fed will cut rates by 25 basis points at its November meeting, but the decision in December could be up in the air depending on upcoming wage and inflation data.”

The Bureau of Labor Statistics (BLS) will release its October employment summary on Friday at 8:30 a.m. Eastern Time. A consensus compiled by FactSet predicted nonfarm payrolls would grow by 120,000, up from 254,000 in September.

The BLS said worker strikes at companies like Boeing (BA) will reduce the number of non-agricultural employees by 41,000. The impact of recent hurricanes in Florida and North Carolina has yet to be quantified.

Economists expect the unemployment rate to remain stable at 4.1%.

The S&P 500 fell 1.9% and stood at 5,705 at the end of October. The Dow Jones Industrial Average fell 0.9% to close the month at 41,763. The Nasdaq Composite lost 2.8% to 18,095 this Halloween.

And that's all about the importance of the Magnificent 7. It's just math: their collective valuation means they make up large portions of the capitalization-weighted indices, and if they move, those indices will move with them.

The Magnificent 7 report

In fact, pre-market trading suggested a gap-down was opening today, as two Mag 7 leaders reported solid operating and financial numbers after Wednesday's closing bell, but this time not with the Wall's beat-and-raise cadence Street could keep up.

Big Tech companies' investment budgets continue to expand, even as investors and analysts alike continue to hope for greater returns from their significant investments in artificial intelligence (AI).

Metaplatforms (META) shares fell 4.1%, even after Facebook, Instagram and WhatsApp parent companies Beat sales and profit estimates for its third quarter.

User growth numbers fell short of forecasts and Meta's capital expenditure budget rose 36% to $9.2 billion in the third quarter. Management said in a statement that it expected a “significant acceleration” in capital spending in 2025.

Like META, Microsoft (MSFT) shares fell 6.1% after the tech giant beat revenue and profit expectations for the first quarter of fiscal 2025 issued guidelines that fell short.

Management forecast Azure revenue growth of 31% to 32%, versus expectations of 32.25%. Azure revenue increased 33% in the fiscal first quarter. Microsoft's capital spending rose 5% to $20 billion in the third quarter.

With results from META and MSFT as well Tesla (TSLA) and alphabet (GOOGL) in the books, Amazon.com (AMZN) and Apple (AAPL) are in the Earnings calendar Spotlight after the conclusion tonight.

Nvidia (NVDA) will be the last Mag 7 to report on November 20th.

Carvana rises after profits, Uber slumps

Carvana (CVNA) shares rose 19.3% after the online used car retailer posted revenue and profit gains in the third quarter and gave a strong outlook for the fourth quarter.

“The third quarter was another exceptional quarter for Carvana. We delivered record performance across virtually all key financial metrics,” Carvana CEO Ernie Garcia said in a statement.

“Most importantly, our customer experiences, financial performance and pace of growth continue to differentiate us from the competition in our industry. Today we are the most profitable and fastest growing automotive retailer and there is still a lot of work to do.”

An analyst sees There's a lot more upside for CVNA from here.

Uber technologies (UBER) shares fell 9.3% after the ride-hailing company beat third-quarter revenue and profit expectations but fell just short of gross bookings expectations.

In keeping with the theme of the day, there was also Uber Fourth quarter forecast that was just below expectations.

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