Wall Street slides on big tech earnings and U.S.-China trade talks

[Wall Street Sign with US Flag Behind]
narvikk

Wall Street was lower on Thursday as Meta (META [https://seekingalpha.com/symbol/META]) and Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]) earnings failed to impress investors. Market focus now has shifted to Apple (AAPL [https://seekingalpha.com/symbol/AAPL]) and Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]) ahead of their reports, while traders also digest the latest updates from U.S.-China trade talks.

Falling the hardest has been the tech focused Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) which was last lower by 1.2%. At the same time, the benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) was in the red by 0.6%, and the blue-chip Dow (DJI [https://seekingalpha.com/symbol/DJI]) was near even.

From a sector point of view, six of the 11 S&P segments are trading up in the green with Real Estate leading the way. At the other end of the spectrum, the Consumer Discretionary space has suffered the most so far.

U.S. Treasury yields inched higher as the longer-end U.S. 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) pushed up 1 basis point to 4.08% and the shorter-end U.S. 2-year Treasury yield (US2Y [https://seekingalpha.com/symbol/US2Y]) moved up by 1 basis point to 3.60%.

Earnings data from Meta Platforms (META [https://seekingalpha.com/symbol/META]) and Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]) have dampened market momentum with META down 11.5% and MSFT lower by 3.3%. At the same time, Alphabet (GOOG [https://seekingalpha.com/symbol/GOOG])(GOOGL [https://seekingalpha.com/symbol/GOOGL]) has responded positively to its latest earnings figures as it has climbed 3.4%.

In the day ahead, traders will get more tech earnings, with Apple (AAPL [https://seekingalpha.com/symbol/AAPL]) and Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]) set to report after the closing bell.

"We expect Amazon to miss expectations in its Thursday earnings report, and this is why we believed they pre-announced so many layoffs this week. Amazon's stock has underperformed and it's not as good of a business as many on Wall Street think," David Trainer, CEO of New Constructs said.

"We expect Apple to beat Wall Street's earnings expectations on the back of strong iPhone 17 sales. These strong iPhone sales show that even in this AI world, we still need a strong network of physical devices to drive AI adoption and use, and Apple is at the center of that, even if their AI strategy is minimal," Trainer added.

U.S. President Donald Trump announced a one-year agreement with China covering rare earths and critical minerals, while also halving fentanyl-related tariffs on Beijing (from 20% to 10%), effective immediately, following his meeting with Chinese President Xi Jinping in South Korea on Thursday.

"Despite its brevity, it appears that there was some progress in U.S.-China trade negotiations. But perhaps not quite as much as President Trump had signaled earlier this week...There was no word on either the future of Taiwan or TikTok. So, summing up the conclusion to this historic meeting: underwhelming," David Morrison, senior market analyst at Trade Nation, said.

Furthermore, the Fed on Wednesday reduced its benchmark interest rate by 25 basis points to 3.75%-4.00%, its second straight cut, as it seeks to ease off the brakes in an effort to protect the labor market.

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