Today, PCE came in line with economist expectations. Google's dip was not bought and finished the day around 12% down, dragging the overall NASDAQ tech-heavy stock index. Although Google has had a bad earnings report, let's not forget that it's a tech company that has been at the forefront of technology since the early days of the internet, dominating the search engine market for generations.
Alphabet Miss Sparks AI Capex Anxiety
Wall Street slid across the session as an Alphabet revenue miss re-ignited deep market anxiety over escalating artificial intelligence capital expenditure. Investors grew increasingly wary of mega-cap tech balance sheets, while a $44 billion U.S. Treasury auction of seven-year notes cleared at a high yield of 4.894 percent amid ongoing debate over the Federal Reserve rate pause.
Amazon led major single-name losses after shares tumbled on a lower Christmas sales forecast, while Microsoft moved to raise up to $25 billion in the bond market to fund its AI buildup. Intel disappointed with its forward guidance, citing weakness in PC demand and an Israel fab blast, while Roblox slumped on missed user growth expectations.
In commodities, iron ore gained on improving steel mill output, while Northwest European gasoline margins fell over $3 as stocks rose. Elsewhere, Brazil saw its national debt climb to $1.8 trillion under surging interest costs, and BYD missed earnings estimates as China's electric vehicle price war worsened. Big tech capital expenditure trends and corporate debt issuance remain the top drivers to watch next.
Amazon and Intel Tumble After Hours
Amazon and Intel are both down aftermarket with disappointment in earnings, and we have seen Amazon shares down as much as around 10% in the after-hours and Intel down as much as 20% in the aftermarket. If you combine that with how much market cap Alphabet GOOGL has lost today, things could quickly turn risk-off in tech tomorrow's trade.
Market Outlook and Buying Opportunities
But then again, this is financial markets where anything can happen and risk appetite can change in an instant, and then markets get volatile and reprice themselves fast. It could be seen as buying stocks at a discount or an entry price for big capital to scale into the tech AI trade to gain exposure as the industrial build out continues.
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