On the winning side of Big Tech was Alphabet. Shares of Google’s parent company climbed 3.5 per cent after its profit and revenue for the latest quarter easily topped analysts’ expectations.
How such companies do matters incredibly for investors. The trio of Alphabet, Meta and Microsoft alone account for 14.5 per cent of the total value of all the companies in the S&P 500 index, which dictates the movements for many 401(k) accounts. That means they and a handful of other Big Tech stocks can easily overshadow what hundreds of other companies are doing.
Elsewhere on Wall Street, Chipotle Mexican Grill tumbled 16.9 per cent after the restaurant chain pointed to all the pressures weighing on its customers, particularly younger ones and those who aren’t making high incomes. Chipotle cut its forecast for an important underlying measure of sales growth this year, as CEO Scott Boatwright said that households making less than $US100,000 are dining out less often because of concerns about the economy and inflation.
He pointed specifically to 25- to 35-year-old customers, who are feeling the weight of unemployment, increased student loan repayments and slower growth with respect to inflation, and he said he thinks restaurants across the industry are seeing something similar.
Eli Lilly, meanwhile, rose 4.4 per cent after delivering stronger profit and revenue for the latest quarter than analysts expected. It credited strong growth for its blockbuster Mounjaro and Zepbound drugs for diabetes and obesity, and it raised its full-year forecasts for revenue and profit.
Sherwin-Williams was one of the biggest reasons the Dow Jones Industrial Average was doing better than other indexes, because the paint company can have a bigger influence on it than on the S&P 500. It rose 1.2 per cent after reporting a stronger profit for the latest quarter than analysts expected. That was despite what CEO Heidi Petz called a “demand environment that remains softer for longer.”
Visa also helped lift the Dow after adding 1.3 per cent following its own better-than-expected profit report.
In the bond market, Treasury yields held relatively steady as traders continue to pare expectations that the Federal Reserve will cut its main interest rate in December.
Traders are still betting on it as likely, according to data from CME Group, but no longer as a near certainty. That’s after Fed Chair Jerome Powell admonished markets the day before, saying a December cut “is not a foregone conclusion — far from it.”
The Fed has lowered its main interest rate twice this year in hopes of boosting the slowing job market. But officials have also said they may have to halt cuts if inflation accelerates beyond its still-high level, because lower rates can worsen inflation.
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The yield on the 10-year Treasury rose to 4.09 per cent from 4.08 per cent late Wednesday and from 3.99 per cent the day before Powell’s warning.
In stock markets abroad, indexes fell 0.5 per cent in France and fell by less than 0.1 per cent in Germany after the European Central Bank decided not to move its main interest rate.
Tokyo’s Nikkei 225 edged up by less than 0.1 per cent after the Bank of Japan likewise held rates steady.
AP
