In a dramatic turn of events, the Nasdaq Composite fought to regain its footing on Friday, attempting to recover from the steep losses it experienced earlier in the week.
The driving force behind this resurgence was none other than tech giant Amazon, whose stellar third-quarter results sent shockwaves through the stock market.
The tech-heavy Nasdaq index surged nearly 1%, injecting fresh optimism into investors.
Simultaneously, the S&P 500 made its own gains, advancing by 0.4%. However, the Dow Jones Industrial Average found itself trading slightly lower, reflecting the market’s mixed sentiments.
Amazon, a true heavyweight in the tech sector, led the charge by soaring nearly 5% after decisively surpassing analysts’ expectations for both revenue and earnings in the third quarter.
This impressive performance not only boosted Amazon’s shares but also inspired confidence in other mega-cap tech stocks like Alphabet and Microsoft, which followed suit with premarket gains.
Nevertheless, not all was rosy in the stock market. Ford faced a 4.2% decline after failing to meet third-quarter earnings expectations and withdrawing its guidance for the year.
The reason cited for this disappointing performance was the UAW strike, which had a significant impact on the company’s operations.
The backdrop to these market movements was a week of turbulence, with both the S&P 500 and Nasdaq Composite suffering losses exceeding 1% each on Thursday.
The Nasdaq, in particular, plunged deeper into correction territory, exacerbating concerns among investors. The Dow, too, bore the brunt of the turmoil, shedding over 250 points.
As the week unfolded, it became evident that the stock market was on track for substantial weekly losses. The Dow and S&P 500 were down by 1% and 2%, respectively, over the week, while the Nasdaq had fallen by a more significant 3%.
Sonia Meskin, the head of U.S. macro at BNY Mellon Investment Management, added a dose of caution to the mix. Speaking on CNBC’s “Closing Bell,” she expressed skepticism about the possibility of a year-end rally, stating, “We’re actually a bit less sanguine on equities.”
She went on to explain that their central expectation for the S&P 500 at the year’s end is around 4,000, although she acknowledged that there was some uncertainty surrounding this projection.
The market’s immediate future remains uncertain, with various factors, including inflation and corporate earnings, playing pivotal roles. Futures showed little change following the release of the personal consumption expenditures (PCE) reading for September.
The core key inflation measure increased by 0.3% in September, aligning with the 3.7% year-over-year increase, as predicted by economists polled by Dow Jones. However, consumer spending exceeded expectations, with a 0.7% increase.
The PCE, often referred to as the Federal Reserve’s preferred inflation gauge, will continue to be closely monitored by investors and policymakers alike.
Its performance will undoubtedly influence the market’s trajectory as we head into the final stretch of the year, leaving us all wondering whether Amazon’s spectacular earnings report is the spark needed for a broader stock market resurgence or just a fleeting glimmer in a turbulent financial landscape.