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Nasdaq Futures Plunge as Companies’ Earnings Fall Short: Markets Wrap

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Investors brace themselves as Nasdaq futures take a hit, reflecting the consequences of disappointing earnings reports, adding another layer of uncertainty to the volatile market landscape.

Stocks Tumble as Companies Report Weaker-Than-Expected Earnings

Stocks took a hit as investors reacted to companies reporting weaker-than-expected earnings. Nasdaq index futures dropped about 1%, reflecting the bearish sentiment. Several major tech companies experienced declines, with Facebook’s parent company Meta Platforms Inc. sinking as much as 4% and Google’s owner Alphabet Inc. losing 1.8%. Inc. also saw a slide of 1.2% ahead of its earnings report.

The negative sentiment extended beyond the stock market, with European and Asian equities also recording steep losses. The US dollar strengthened, gold prices rose 0.6%, and Treasury yields moved closer to 5%. The yen slumped against the dollar, sparking speculation about government intervention in the currency market.

Investors are becoming increasingly concerned about the macroeconomic backdrop and the impact on economically sensitive stocks. Earnings missteps from major US tech companies have already wiped off $200 billion from their market value. These missteps are causing investors to reconsider the sky-high valuations of these companies, especially in light of rising Treasury yields. While the Nasdaq 100 has remained resilient so far this year, with a 31% increase, there is growing concern about its vulnerability in a broader stock market selloff.

In addition to corporate news, economic data is also in focus. US initial jobless claims and GDP numbers are set to be released, along with a policy decision from the European Central Bank, which is expected to keep interest rates on hold for the first time in over a year.

Oil prices fell as the US dollar rallied, but they held onto almost half of the previous day’s surge driven by Israel’s confirmation of preparations for a ground invasion of Gaza.

Key corporate highlights include Unilever Plc, which fell 2.7% due to a decline in market share and lower-than-expected sales growth. WPP Plc also dropped 3% after reporting sluggish sales and cutting its revenue growth outlook. Mercedes-Benz Group AG experienced a 6% decline in third-quarter margins, attributed to lower car prices and increased costs. Standard Chartered Plc plunged 12% after missing profit estimates in the third quarter, citing charges related to investments in China. Siemens Energy AG slumped over 30% as it seeks state guarantees to support its troubled wind-turbine unit. On a positive note, BE Semiconductor Industries N.V. jumped over 11% following strong third-quarter results for its hybrid bonding systems.

Looking ahead, market participants will be closely watching key events this week, including the European Central Bank interest rate decision, US economic data, and earnings reports from companies such as Intel and Amazon.

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