Big Tech loses steam, blowing away Wall Street's euphoria

The US stock market on October 30 (closing the trading session early morning October 31, Vietnam time) witnessed a clear correction when selling pressure increased in the leading technology stocks. After many sessions of strong increases and consecutive new records at the beginning of the week, investors became more cautious due to mixed signals about corporate profits as well as the interest rate policy views from the US Federal Reserve (Fed).

Meta, Microsoft plummet, Fed sends tough signals, Wall Street stumbles from record peak

At the close, the S&P 500 fell 1.0%, or 68.25 points, to 6,822.34 points. The Nasdaq Composite lost 1.6% (-377.33 points) to 23,581.14 points, under strong pressure from the technology giants. The Dow Jones Industrial Average fell slightly by 0.2% (-109.88 points) to 47,522.12 points. The small-cap Russell 2000 index also fell 0.8% to 2,465.94 points.

The negative developments on Wall Street came right after the indexes simultaneously hit historical peaks in the previous session, partly reflecting the "cooling" of optimism that was fueled by expectations of the results of US-China trade negotiations and Big Tech's third-quarter 2025 profit reports.

The session's highlight was the sharp decline in Meta Platforms and Microsoft, two of the stocks with the biggest impact on the S&P 500.

Meta Platforms shares fell as much as 11.3%, erasing most of the year's gains, after the company revealed plans to sharply increase investment in artificial intelligence in 2026. Analysts are concerned that capital spending on AI infrastructure could put pressure on profits, as the technology industry enters a fierce cash-burning race.

Meanwhile, Microsoft fell 2.9% despite reporting better-than-expected quarterly revenue and profit. Management's warning that capital spending will continue to rise in the coming fiscal year has many investors worried that profit margins could decline, especially as Azure growth is seen slowing.

On the other hand, Alphabet, Google’s parent company, rose 2.5% thanks to steady growth in its advertising and cloud computing businesses. However, this increase was not enough to offset the losses from Meta and Microsoft, as the Big Tech trio alone accounts for 14.5% of the S&P 500’s total market capitalization. That means the group’s movements can easily influence the overall market trend.

Outside the tech sector, Eli Lilly was a rare bright spot, rising 3.8% after posting better-than-expected revenue thanks to booming demand for diabetes and obesity drugs like Mounjaro and Zepbound.

The downward pressure also came from developments in the currency market. Although the Fed made a 25 basis point cut as expected on October 29, Chairman Jerome Powell emphasized that further rate cuts in December were not certain.

The statement immediately reduced expectations for a third rate cut this year: the probability of a December cut has fallen to about 70%, from more than 90% just days ago, according to CME Group data.

The yield on the benchmark 10-year Treasury note held at 4.08%, up from 3.99% before Powell's warning, reflecting investor caution about the cost of capital in the near term. Inflation fears may persist, prompting the Fed to take tighter action to control the risk of prices rising again.

At the same time as the market correction, the event of interest was the meeting between US President Donald Trump and Chinese President Xi Jinping. The White House described the dialogue as a success beyond expectations, even “12 out of 10”. President Trump also pledged to consider cutting tariffs on Chinese goods.

However, analysts say these developments only have a short-term psychological impact, as structural disagreements between the world's two largest economies have yet to be completely resolved.

“The results are good, but not good enough for what the market was hoping for. These are just small gestures of goodwill, not a breakthrough deal,” said Brian Jacobsen, chief economist at Annex Wealth Management.

The developments of the October 30 session showed that the market is shifting from a state of excitement to caution. The indices did not fall deeply, but the correction was considered necessary after a series of strong increases based on many positive expectations: Business results exceeded forecasts; Hope that the Fed would accelerate the easing roadmap; The international trade context improved.

However, when the supporting factors are unclear, the psychology of profit-taking is difficult to avoid.

In the current context, investors need to pay special attention to three factors that could lead market trends in the coming time:

- The Fed's interest rate orientation directly affects stock valuations and the cost of capital.

- Profit growth of Big Tech , the group that has the strongest influence on the index.

- Substantive progress in US-China relations , impact on international supply chains and capital flows.

The session on October 30 may just be a “step back to go further”, but caution is something that investors cannot lack in this volatile period.

Source: https://thoibaonganhang.vn/big-tech-hut-hoi-thoi-bay-da-hung-phan-cua-pho-wall-172828.html