[New York Stock Market] Mixed Close Amid Big Tech Earnings Expectations... Nasdaq Hits Another Record High

The three major indices of the U.S. New York Stock Exchange closed mixed on the 29th (local time). Buying surged in tech stocks amid expectations for the upcoming earnings reports from big tech companies this week. With job openings last month hitting the lowest level in 3 years and 8 months, fueling expectations for interest rate cuts, government bond yields declined.

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On this day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 42,233.05, down 154.52 points (0.36%) from the previous trading day. The large-cap-focused S&P 500 rose 9.4 points (0.16%) to 5,832.92, and the tech-heavy Nasdaq Composite surged 145.56 points (0.78%) to close at an all-time high of 18,712.75.

Investor attention was focused on the big tech earnings scheduled for this week. Alphabet, Google's parent company, reported after the market close that its Q3 revenue reached $88.27 billion, with earnings per share (EPS) of $2.12. This exceeded market expectations. Earlier, market research firm LSEG had forecasted Alphabet’s revenue and net income at $86.3 billion and $1.85 per share, respectively. Alphabet’s shares rose 1.66% during regular trading and jumped 4.18% in after-hours trading following the better-than-expected earnings announcement.

This week, five of the 'Magnificent 7' companies will release their earnings. Following Alphabet, Meta, Facebook’s parent company, and Microsoft (MS) will report on the 30th. Apple’s earnings are scheduled for the 31st. Amid already elevated stock prices, investors are expected to focus on whether big tech’s growth momentum will continue and any commentary related to artificial intelligence (AI) investments.

Sam Stovall, Chief Investment Strategist at CFRA Research, said, "The market is expensive right now," adding, "Investors believe that earnings growth must accelerate to justify such price-to-earnings ratios (PER)."

With the U.S. presidential election just a week away on November 5th, some analysts warn that market volatility could increase due to uncertainty. Jonathan Krinsky, Senior Market Technician at BTIG, forecasted, "I do not expect a bear market, but there will likely be downward volatility in the coming weeks."

The employment data released that morning indicated a cooling labor market. According to the U.S. Department of Labor’s September Job Openings and Labor Turnover Survey (JOLTs), job openings last month totaled 7.443 million. This was the lowest level in 3 years and 8 months since January 2021, significantly below market expectations (7.98 million) and the previous month’s figure (7.861 million).

Hiring was at 5.6 million, and the unemployment rate stood at 3.5%, up from 3.4% in August. Quits totaled 5.2 million, down 326,000 from a year earlier. The quit rate fell from 3.5% to 3.3% over the same period. Among these, involuntary separations, meaning layoffs, reached 1.8 million, the highest level in 1 year and 9 months since January 2023. The layoff rate rose from 1.0% a year ago to 1.2%. Voluntary quits were 3.1 million, with a quit rate of 1.9%. A year ago, voluntary quits and the quit rate were 3.6 million and 2.3%, respectively, indicating a decline in both. This reflects a waning confidence among workers about finding new jobs.

Government bond yields reversed from rising to falling. The U.S. 10-year Treasury yield, a global benchmark for bond yields, dropped 2 basis points (1bp = 0.01 percentage points) from the previous day to 4.25%, while the 2-year Treasury yield fell 4 basis points to 4.1%.

International oil prices declined. West Texas Intermediate (WTI) crude fell $0.17 (0.3%) to close at $67.21 per barrel, while Brent crude, the global oil price benchmark, dropped $0.30 (0.4%) to $71.12 per barrel.