The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA / SPENCER PLATT)
The New York Stock Exchange ended down on Thursday, weighed down by forecasts deemed disappointing by Meta, some mixed publications and a US growth figure whose weakness was surprising.
The Dow Jones fell 0.98%, the Nasdaq index lost 0.64% and the broader S&P 500 index lost 0.46%.
For Angelo Kourkafas, from Edard Jones, the Meta results, Wednesday after the stock market, set the tone for Thursday’s session.
The social media giant exceeded market projections in the first quarter, but operators mainly retained the second quarter forecasts, considered timid.
Furthermore, the increase in the investment range for the current financial year also displeased and the stock plunged by 10.56%.
CEO Mark Zuckerberg indicated that the Menlo Park group intended to make major financial efforts to develop its own artificial intelligence (AI) tools and models.
“Meta’s second-quarter forecast has investors worried that spending on AI will also cut into profits from other tech stocks,” Matthew Weller of Forex.com said in a note.
“Market expectations are so high for tech that we are seeing an adjustment in valuations,” commented Angelo Kourkafas.
Meta’s slight lack of momentum also penalized its major AI rivals, Microsoft (-2.45%) and Alphabet (-1.97%), which published their results after the market.
Already destabilized, the New York market frankly faltered after the Department of Commerce announced that growth had reached only 1.6% at an annualized rate in the first quarter, while economists expected 2.5%.
Worse, the elements relating to prices in Thursday’s report showed an acceleration in inflation, with a rate of 3.7% against 3.4% announced, at an annualized rate.
“The combination of growth well below projections and a price index above raises the specter of stagflation”, a feared economic situation, which combines anemic economic activity and significant price increases, summarized, in a note, José Torres, of Interactive Brokers.
But after coming close to the knockout, Wall Street recovered a good part of its losses at the end of the session.
“The details (of the growth report) are better than the main figure suggests,” said Angelo Kourkafas.
Core growth, that is to say excluding public spending, exports and changes in inventories, reached 2.8%, a level much higher than the overall figure.
“The economy is slowing down, but not as much as one might think from the surface of things,” insisted Angelo Kourkafas.
Although having reported strong demand for remote computing (cloud) and AI, IBM (-8.25%) missed the target on its first quarter turnover and was also penalized .
The Armonk (New York State) group also announced, Wednesday after the stock market, the acquisition of the cloud specialist HashiCorp, for $6.4 billion.
Although introduced during a hectic session, the cybersecurity specialist Rubrik shone for its debut on the stock market (+15.62%). The Palo Alto group, of which Microsoft is a shareholder, raised some $752 million during this operation.
Elsewhere on the stock market, Caterpillar slipped (-7.02%), after indicating a deceleration in demand, particularly in the construction sector.
American Airlines shares gained 1.51%, despite a heavier loss than expected over the first three months of the year. Chief Financial Officer Devon May said summer bookings exceeded those of last year.
Its competitor Southwest took a nosedive (-6.96%), after also revealing a larger loss than expected and announcing measures aimed at adjusting to a lower number of aircraft delivered by Boeing, in particular the elimination of four servings.
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