US tech stocks slide despite resilient economic data

US equities ended lower on Thursday, with the Nasdaq Composite falling 1.66% to 26 110.33, the S&P 500 declining 0.64% to 7 694.12 and the Dow Jones slipping 0.56% to 52 182.34. Technology shares led the losses as Alphabet’s disappointing results raised fresh concerns about whether substantial investment in artificial intelligence (AI) will deliver sufficient returns. Microsoft bucked the trend after stronger-than-expected quarterly earnings, supported by 48% growth in its Azure cloud business. 

On the economic front, September’s personal consumption expenditures (PCE) inflation broadly matched expectations, with headline inflation rising to 3.60% year on year from 3.40% in August. Meanwhile, US GDP grew at an annualised rate of 3.40% in the third quarter, exceeding market expectations of 3.20%.

European equities finished higher on Thursday, with the STOXX 600 gaining 1% to reach its strongest level in almost two months. The STOXX 50 climbed 0.72% to 6 211.92, while Germany’s DAX led the advance, rising 1.36% to 26 052.75. France’s CAC 40 added 1.05% to 7 970. The gains came as the European Central Bank (ECB) maintained its policy stance. ECB President Christine Lagarde said officials had debated raising rates and indicated that a further rate move in December 2026 remained likely.

The bank kept rates unchanged, citing possible inflation pressure from energy, although Lagarde’s focus on steady core inflation and tighter financial conditions struck some economists as cautious. She also confirmed her intention to step down early in February 2027. She reassured markets that the bank could respond to unjustified pressure on French bonds, but warned that rising global yields would raise financing costs for heavily indebted governments.

The UK’s FTSE 100 was more restrained, closing 0.26% higher, although energy stocks provided support. Shell advanced after lifting its quarterly buyback to $5 billion from $3 billion, supported by stronger refining margins and higher earnings, while BP also gained. AstraZeneca climbed ahead of its results, and BAE Systems and Rolls-Royce were among the other notable risers. Lloyds shares weakened even though its third-quarter profit beat expectations, with net interest income up 10% year on year to £3.8 billion, as unchanged guidance disappointed investors.

Asian markets ended the day’s session mixed, with Japan’s Nikkei 225 climbing 1.10% to 64 659.47, supported by gains in semiconductor stocks. In contrast, Hong Kong’s Hang Seng Index fell 0.66% to 22 943.42, while China’s Shanghai Composite declined 0.90% to 3 654.38. Sentiment across the region was influenced by mixed signals from the technology sector, as investors weighed Samsung Electronics’ latest results against the contrasting outcomes from US technology giants Alphabet and Microsoft.

The local bourse was mixed, with the All Share Index and the Top 40 rising by 0.25% and 0.30%, respectively, while the rand weakened by around 0.12% to R16.63 against the US dollar at 20h42 SAST. Government bonds firmed slightly, with the yield on the 2035 benchmark falling three basis points to 8.55%. On the economic front, producer price inflation accelerated to 6.20% year on year in September, from 5% in August, while revised GDP figures showed that South Africa’s economy is 5.30% larger than previously estimated.

Commodity markets broadly ended lower, as precious and industrial metals came under pressure following the US Federal Reserve’s latest interest-rate decision, which strengthened the US dollar. Gold fell by 1.43%, while silver and platinum led the losses, closing 3.63% and 3.75% lower, respectively. Oil prices also declined, with Brent crude falling 0.44% to $114.81 per barrel at 20h17 SAST. Meanwhile, West Texas Intermediate (WTI) crude traded slightly lower at around $100.22 per barrel.