It was a dreadful morning for the stock market as Nasdaq 100 futures plummeted.
One of the main catalysts for the steep decline was Meta Platforms Inc., which dropped 21.7% in pre-market trading.
Total losses for Meta, the brainchild of Facebook CEO Mark Zuckerberg, were estimated to be around $75 billion. Meta also posted a drop in their third-quarter earnings, and the forecast for next quarter is much of the same.
Subpar earnings reports from growth companies like Microsoft Corp. and Alphabet Inc. have increased skepticism of slowed economic growth, leading both the S&P 500 and Nasdaq to the end of three-day gains streaks on Wednesday.
There were some bright spots, including Caterpillar Inc., which jumped 4.2% on the Nasdaq after posting positive third-quarter stats. Merck & Co. Inc. and Honeywell International Inc. both showed signs of improvement with gains of 2.5% and 5.2% respectively.
Twitter jumped 1.1% after Elon Musk claimed to have paid a visit to the company’s headquarters earlier in the week. This morning, the eccentric billionaire finally completed his quest to commandeer the company, officially acquiring what some refer to as the “modern-day town hall” for $44 billion dollars.
Elon Musk has officially bought Twitter for $44 Billion. He plans to save humanity with the purchase‼️🙏🎉 pic.twitter.com/TpvmuKrMMy
— Daily Loud (@DailyLoud) October 27, 2022
Despite the growth from those corporations, financial experts such as Laith Khalaf, head of investment analysis at AJ Bell, predict that an economic turnaround isn’t right around the corner.
“So far Meta is just the latest big tech company to disappoint. After a steady start to the U.S. third-quarter earnings season, things are starting to look a lot less rosy,” Khalaf told Newsmax.
Aggregate growth for the S&P 500 was forecasted at 4.5% year-on-year at the beginning of October. The current projection for S&P growth according to Refinitiv is 2.3%, a nearly 50% decline.
These bleak predictions combined with the slowed corporate growth have many pinning their hopes on the Feds not raising interest rates.
Wall Street and Corporate America might be in luck if the Federal Reserve follows the trend of our northern neighbor.
Bank of Canada announced a modest rate hike on Wednesday, an increase smaller than what was predicted.
Today, the European Central Bank raised interest rates by 0.75 points, the highest mark in over a decade.
That troubling news makes the December policy meeting even more worrisome.