NEW YORK / LONDON (IT BOLTWISE) – U.S. stock markets fell from record highs as investors reacted to mixed developments surrounding the U.S.-China trade war and earnings from major technology companies. Despite positive talks between President Trump and Xi Jinping, tensions remain. Shares of Meta and Microsoft posted significant losses, while Alphabet rose.
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The US stock market experienced a significant decline after previously reaching record highs. The S&P 500 fell 1%, while the Dow Jones Industrial Average fell 0.2%. The Nasdaq Composite was particularly hard hit, falling by 1.6%. These developments followed a highly anticipated meeting between the US and China, where President Trump gave a very positive assessment of the talks with Xi Jinping. Yet tensions remain between the world’s two largest economies.
Expectations for the talks were high as many investors hoped for significant progress. But the results were perceived as more symbolic gestures than comprehensive agreements. Brian Jacobsen, chief economist at Annex Wealth Management, commented that while the results were fine, they did not meet high expectations. This disappointment was reflected in the prices of the technology giants.
Meta Platforms, Facebook’s parent company, posted an 11.3% decline, significantly denting year-to-date gains. Analysts expressed concerns about the company’s planned investments in artificial intelligence through 2026. Microsoft also suffered a 2.9% loss despite reporting better-than-expected quarterly results. The planned investments in the Azure platform and the associated growth expectations caused uncertainty among investors.
In contrast, Alphabet, Google’s parent company, saw shares rise 2.5% after quarterly results beat analysts’ expectations. The importance of these companies to the market is enormous, as together they account for a significant portion of the total value of the S&P 500. Their price movements therefore have a major impact on the overall development of the market.
There have also been notable developments outside of the technology sector. Chipotle Mexican Grill posted an 18.2% decline after the company cited economic stress among its customers. Younger customers and those with lower incomes who eat out less often due to inflation and economic uncertainty are particularly affected. In contrast, Eli Lilly rose 3.8% as the company reported strong results for its diabetes and obesity drugs.
Overall, the market remains volatile as investors continue to monitor the Federal Reserve’s monetary policy decisions. Fed Chairman Jerome Powell’s announcement that a rate cut in December was not guaranteed added further uncertainty. 10-year Treasury yields remained stable, indicating a cautious stance among investors.
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