S&P 500 Falls as Big Tech Stocks Slide and Investors Eye U.S.-China Trade Progress
The S&P 500 slipped on Thursday, dragged down by weakness in big tech stocks following a wave of mixed corporate earnings. Investors also weighed the potential de-escalation of U.S.-China trade tensions after a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping.
At 12:48 p.m. ET, the Dow Jones Industrial Average gained 176 points, or 0.4%, while the S&P 500 dropped 0.4% and the NASDAQ Composite fell 0.9%.
Trump Hails “Amazing” Meeting With Xi, Signals Trade Progress
President Donald Trump described his meeting with China’s Xi Jinping as “amazing” and “outstanding,” expressing optimism that a new trade deal could be reached “pretty soon.” While no signing date was confirmed, Trump said he plans to visit China in April.
The U.S. president noted there were “no roadblocks” on rare earth agreements, confirming that Washington will pursue annual deals to maintain supplies of critical minerals. He added that China will resume large-scale agricultural imports, including soybeans, although specific targets were not disclosed.
Trump also announced a cut to fentanyl-related tariffs, lowering them to 10% effective immediately, while other U.S. tariffs on Chinese goods remain near 47%. He said Beijing agreed to curb the export of chemicals used to make the illegal drug.
Fed Stresses Uncertainty After Rate Cut
The Federal Reserve reduced interest rates by 25 basis points to a range of 3.75%–4.00%, marking its second straight cut. However, Fed Chair Jerome Powell warned that future moves remain uncertain, emphasizing that policymakers are “navigating in the fog” amid mixed economic data.
Powell pushed back against expectations for another rate cut in December, calling it “far from” guaranteed. Analysts at ING Bank said inflation concerns and a softer labor market continue to complicate the outlook. They still expect two additional rate cuts next year to support growth and potentially weaken the U.S. dollar further.
Tech Earnings Weigh on Wall Street
Investors continued to digest quarterly results from major tech companies that reported after Wednesday’s close.
Meta Platforms (NASDAQ:META) shares dropped sharply after the company pledged to increase spending on artificial intelligence development, raising investor concerns about profitability.
Alphabet (NASDAQ:GOOGL) reported record third-quarter revenue of about $35 billion, up 33% year over year, boosted by strong results in cloud computing and digital advertising.
Microsoft (NASDAQ:MSFT) also beat expectations, with surging demand for AI and cloud services prompting the company to double its data center capacity over the next two years.
Meanwhile, Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) were set to release their results after the market close, keeping investors focused on whether the tech sector could regain momentum.
Strong Earnings in Other Sectors
Outside the tech space, several companies posted positive results. Restaurant Brands (NYSE:QSR), parent of Burger King and Tim Hortons, rose after beating third-quarter expectations thanks to robust international sales.
Eli Lilly (NYSE:LLY) gained after raising its full-year revenue forecast, driven by strong demand for its Zepbound weight-loss drug.
Estee Lauder (NYSE:EL) surged after reporting better-than-expected sales and profit for the quarter, supported by a rebound in Chinese demand.
However, Biogen (NASDAQ:BIIB) fell after cutting its full-year profit outlook despite surpassing Wall Street estimates for both earnings and revenue.
