US equity benchmarks increased on Wednesday, as investors analyzed a series of earnings reports. They also waited to see more results from the megacap technology companies.
The Dow Jones Industrial Average rose by 0.3% at the time this article was written, while the S&P 500 index increased by 0.1% from its previous close.
The Nasdaq Composite Index was slightly higher than in the previous session.
Alphabet’s shares soared following the positive earnings report. AMD shares also fell after its fourth-quarter results failed to impress investors.
Super Micro Computer shares plunged by 32%, putting the entire semiconductor industry in red.
Investors will also be watching for the earnings of major companies like Meta Platforms and Microsoft in the afternoon.
Apple and Amazon will release their results Thursday.
Sam Stovall, chief investment strategist at CFRA Research, told CNBC that
Investors who have a high level of confidence in the technology sector are likely to continue to be encouraged by its results.
Release of Economic Data
Data released on Wednesday showed that the US third-quarter economic growth was lower than expected.
Analysts had predicted that the US economy would grow by 3.1%, but the GDP actually rose by 2.8%.
The US Federal Reserve is expected to cut rates at its next meetings in the remainder of the year, based on the weaker data.
Fed could cut rates further if the economy cools.
The US payroll data released Wednesday showed that the labour market remains resilient.
ADP’s report shows that private job creation in October in the US reached its highest level for more than a decade.
The uncertainty surrounding the US Presidential Election next week will likely weigh on equity averages.
Alphabet shares are surging
Alphabet shares jumped nearly 6% Wednesday following the company’s positive third-quarter earnings report.
On the strength of its cloud business, YouTube advertising sales and YouTube advertising revenue, the company exceeded expectations in terms of revenue and profit.
Stocks of chipmakers also fell sharply Wednesday. Advanced Micro Devices shares fell by 8.9%.
The company’s fourth quarter revenue forecasts and AI chip sales were disappointing to investors.
The semiconductor company reported a revenue of 6,82 billion dollars, exceeding the $6.71 billion expected by LSEG analysts.
The consensus estimate for adjusted earnings per share (92 cents) was met.
The Philadelphia SE Semiconductor Index and NVIDIA fell nearly 3%.
Super Micro Computer sheds 33%
Super Micro Computer shares fell 32% in value after a regulatory filing revealed that Ernst & Young had resigned from its position as the company’s accounting firm.
EY was concerned by the AI server’s “commitment” to integrity and ethical value.
Super Micro Computer was added to S&P 500’s list in March of this year.
Oil prices surge 2%
The oil price rose on Wednesday, as the Organization of Petroleum Exporting Countries (OPEC) may delay the planned production increase from December.
According to a Reuters article, OPEC+ could delay by a whole month its planned 180,000 barrels of oil per day increase.
Reuters reported that sources told them the oil market was not “healthy” enough to accept an increased crude oil production.
Brent crude, at $72.14 a barrel, was up 2% at the time this article was written. West Texas Intermediate crude, however, was still at $68.61 a barrel.
This post Dow, S&P 500 climbs as earnings season heats-up; Alphabet Jumps, Semi Micro Sinks may be updated as new developments unfold.
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