October losses on Wall Street as tech stocks plummet

The sharp drop in US stocks in October erased all the gains made earlier in the month, with tech heavyweights leading the sell-off. The S&P 500 ended down 1.9 percent, while the Nasdaq Composite closed 2.8 percent lower on the final trading day of the month.

Big Tech companies like Microsoft and Meta experienced significant losses, with Microsoft witnessing its largest one-day drop in two years after disappointing quarterly earnings outlook. Meta, the parent company of Facebook, also slid 4.1 percent.

Dec Mullarkey, managing director at SLC Management, noted that tech stocks, which had seen strong gains recently, were now facing high expectations. He emphasized that the growth in artificial intelligence was not going to progress smoothly and setbacks were to be expected.

The market stumble occurred just before earnings reports from other trillion-dollar tech giants like Apple and Amazon. Apple’s after-hours trading saw a decline due to modest growth in smartphone sales, while Amazon rose sharply on the strength of its cloud computing unit.

The declines in the S&P 500 and Nasdaq on Thursday were the largest since September 6, leaving them down 1 percent and 0.6 percent, respectively, for the month. This broke a five-month winning streak for the S&P 500, which had reached record highs on expectations of Federal Reserve easing and positive economic data.

Following the slide, the S&P 500 and Nasdaq were about 2.5 percent and 3 percent below their peaks. The market movements came just days before the US presidential election, with economic stewardship and market outcomes being key points of contention between the candidates.

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Investor anxiety has been rising as the election approaches, and the upcoming Fed meeting has added to overall tensions. Treasury yields and the dollar have seen increases to their highest levels in about three months.

The yield on the two-year Treasury rose to 4.16 percent, marking its largest monthly increase since February 2023. The benchmark 10-year Treasury yield was on track for its biggest monthly rise since September 2022, reaching about 4.28 percent.

The US dollar, measured against major currencies, gained 3.3 percent in October, set for its largest monthly advance since April 2022.