Risk aversion swept across markets on Thursday as investor disappointment over third-quarter tech earnings triggered the steepest drop in major U.S. indices in nearly two months.

Microsoft Corp. MSFT plummeted over 5% by midday trading in New York, on track for its worst session in two years. Although the company surpassed earnings estimates, it forecasted slower growth in its Azure cloud business, dampening future revenue expectations.

Meta Platforms Inc. META also declined by over 4% despite a strong quarterly performance, as the social media giant projected “significant” capital expenditure growth next year, particularly for AI infrastructure.

The elite “Magnificent Seven” tech group shed nearly $500 billion in market capitalization within a single day after reaching a record high of $16.8 trillion. Apple Inc. AAPL and Amazon.com Inc. AMZN are set to report earnings after the market close.

In economic news, inflation sent mixed signals for September. The Personal Consumption Expenditures (PCE) price index slowed as expected to 2.1% annually, while the Fed’s preferred inflation measure, the core PCE price index, remained at 2.7% year over year, slightly above the expected 2.6%.

The S&P 500 dropped 1.4%, and the tech-heavy Nasdaq 100 slid 2.2%, both tracking their worst session since Sept. 6. The CBOE Volatility Index (VIX) surged 12%.

Risk aversion also weighed on commodities, with gold prices dropping 1.7%, marking their worst day since July, and silver plunging 3% after a 2% decline on Wednesday.

Bitcoin BTC/USD slid 2.4%, and crypto-related stocks suffered significant losses. Coinbase Global Inc. COIN tumbled over 10% on disappointing earnings, eyeing its worst day since May.

Thursday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY fell 1.5% to $571.51.
• The SPDR Dow Jones Industrial Average DIA fell 0.8% to $418.60.
• The tech-heavy Invesco QQQ Trust Series QQQ tumbled 2.2% to $485.78.
• The iShares Russell 2000 ETF IWM fell 0.7% to $219.65.
• The Utilities Select Sector SPDR Fund XLU outperformed, rising 1.4%. The Technology Select Sector SPDR Fund XLK lagged, down 2.4%.

Thursday’s Stock Movers

Stocks reacting to corporate earnings were:

• Booking Holdings Inc. BKNG, up over 5%,
• Amgen Inc. AMGN, up 1.7%,
• Starbucks Corp. SBUX, down 0.6%,
• eBay Inc. EBAY, down over 8%,
• MicroStrategy Inc. MSTR, up 1.9%,
• Carvana Co. CVNA, up 24%,
• Mastercard Inc. MA, down 1.8%,
• Merck & Company Inc. MRK, down 2.8%,
• Linde plc LIN, down 2.9%,
• Comcast Corp. CMCSA, up 2.9%,
• Uber Technologies Inc. UBER, down over 11%,
• Eaton Corp. plc ETN, down 5%,
• ConocoPhillips COP, up 6%,
• Bristo-Myers Squibb Co. BMY, up 3.3%,
• Southern Company SO, up 2.2%,
• Altria Group Inc. MO, up 7.6%,
• Regeneron Pharmaceuticals Inc. REGN, down 9%,
• The Cigna Group CI, up 3%,
• Norwegian Cruise Line Holdings Ltd. NCLH, up over 9%.
• Cheniere Energy Inc. LNG, up over 5%.

Large-cap companies slated to report their earnings after the close include Apple Inc, Amazon.com Inc, Intel Corp. INTC, Atlassian Corp. TEAM and Coterra Energy Inc. CTRA.

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Image created using artificial intelligence via Midjourney.