Nasdaq Up 1.4% in Tech Market Rebound; Fed Day Drop Still Hurts
Major earnings reports came in and Microsoft's helped the stock market climb after sharp losses in the previous session.
The Dow Jones lost 1,153 points on Wednesday while tech stocks fell sharply, but Thursday saw the market start to bounce back in early trading as the Nasdaq rose 1.4%.
Microsoft (MSFT) led a strong recovery effort in premarket trading for Thursday morning with a gain of 8.3% as the market still reeled from severe losses in the previous session. Semiconductors performed better ahead of market opening, pushing the Nasdaq higher, but they have a lot of lost ground to make up.
The Dow experienced its sharpest single-day selloff on Wednesday since April of last year, and semiconductor stocks tanked as market sentiment fluctuated wildly. That same sentiment swung back in the opposite direction on Thursday and could lead to a nearly full recovery for some of these stocks by the end of the day.
Microsoft Impresses While Meta Sinks
Both Microsoft and Meta Platforms (META) released quarterly earnings reports on Wednesday, and their outcomes could not be any different. Microsoft impressed with fourth quarter earnings that increased by 18% year over year. They brought in $90.01 billion and reported GAAP earnings per share of $4.81. Both of these figures were much better than Wall Street estimated, and Microsoft attributes that in large part to massive growth from its Azure arm.
Meta Platforms reported revenue of $60.8 billion, which was better than expected and indicated a 28% increase year over year. However, they fell short with their forecast for their current quarter. The company anticipates a very similar revenue to the previous quarter. They also missed the mark with their earnings per share, coming in at $6.18 instead of the anticipated $7.17.
The result for Thursday morning was that Microsoft stock soared by 9.16% and Meta Platforms stock plummeted by 10.2%. Chip stocks continue to experience struggles to maintain any kind of momentum. Qualcomm remains bearish after days of losses, falling another 3% on Thursday. Arm Holdings (ARM) lost another 8% after a lengthy downward trend as well.
Not every chip stock is in serious decline, though. Some of them are showing signs of recovery. Advanced Micro Devices (AMD) fell steadily for the past few days but rose by 5.55% on Thursday morning. Nvidia (NVDA) also turned things around with an increase of more than 2% after sharp losses the previous day.
The Federal Reserve held its monetary policy meeting on Wednesday. As expected, they decided to keep interest rates steady. The next rate change is not expected until September. Of course, inflation will help determine if that will happen, and the Fed is aiming for 2% inflation, but the current rate is far from that at an aggressive 3.5%.
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