Investing.com — Market Recap

The S&P 500 closed sharply lower Thursday as Meta and Microsoft fueled a rout in tech, while hotter inflation muddied the path for deeper Federal Reserve rate cuts.

At 4.00 p.m. ET (2000 GMT), the Dow Jones Industrial Average was down 378 points, or 0.9%, the S&P 500 index fell 1.9%, and the NASDAQ Composite dropped 2.8%.

Microsoft, Meta Slump on Increased Expenses Outlook

Meta Platforms Inc (NASDAQ:META) slumped more than 4% after it racked up fewer than expected users in Q3 and detailed plans to boost spending, offsetting better-than-expected earnings and revenue.

"Uncertainty related to 2025 investment growth will likely limit near-term margin expectations despite the company's 3Q beat," Wedbush noted.

Microsoft Corporation (NASDAQ:MSFT), meanwhile, fell nearly 6% as the tech giant's weaker guidance overshadowed fiscal Q1 results that topped estimates. Analysts at Oppenheimer were quick to downplay the weaker guidance, calling it "conservative."

"While investors may be hung up on the optics of decelerating Azure growth paired with substantial CapEx, we see a path to upward revisions and would be a buyer on weakness," they added.

Quarterly Earnings Continue

There were more earnings to digest Thursday, as the results season continued apace.

• eBay (NASDAQ:EBAY) stock fell 8% after disappointing guidance for the crucial holiday shopping season.
• Robinhood (NASDAQ:HOOD) stock slumped 16% after missing expectations for third-quarter earnings, despite doubling crypto trading volume and revenue year-on-year.
• Uber Technologies (NYSE:UBER) stock fell 9% after gross bookings grew at the slowest pace in over a year, despite edging past quarterly profit estimates.
• Estee Lauder (NYSE:EL) stock slumped 21% after reporting a revenue miss and withdrawing its fiscal 2025 outlook amid ongoing challenges in China and travel retail.

Inflation Comes in Hot Ahead of Fed Meeting Next Week

Data released earlier showed that an inflation metric closely monitored by the Federal Reserve slowed to a 2.1% annual increase, cooling from an upwardly-revised reading of 2.3% in August. Meanwhile, the so-called "core" metric, which excludes volatile items like food and fuel, came in at 2.7% annually, faster than expectations of 2.6% and equaling August's pace.

Separately on Thursday, weekly claims for first-time unemployment benefits dipped to 216,000 from 228,000 in the prior week. These figures come as Fed officials contemplate their next policy decision after cutting borrowing costs by 50 basis points in September. Friday sees the release of the latest nonfarm payrolls data, which could provide further guidance for Fed officials as they meet next week.

(Ambar Warrick and Senad Karaahmetovic contributed to this article.)