Stocks falls on megacap drag, yen stumbles after BOJ announcement
Patrick King works on the floor at the New York Stock Exchange in New York, Oct 29, 2025. (Photo: AP/Seth Wenig)
NEW YORK: Global shares dropped on Thursday (Oct 30) and were set for their biggest daily decline in three weeks, weighed down by megacaps Microsoft and Meta, while the dollar rose against the yen on policy updates from the Federal Reserve and Bank of Japan.
Markets were digesting comments from Fed Chair Jerome Powell, who dampened expectations that the US central bank will cut interest rates at its December meeting after easing by 25 basis points on Wednesday.
Market reaction was muted after US President Donald Trump said he had struck a deal with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming US soybean purchases and keeping rare earths exports flowing, which markets had been anticipating in recent days.
On Wall Street, US stocks closed lower, as Meta Platforms, one of the "Magnificent Seven" group of megacap stocks, plummeted 11.3 percent after it reported quarterly results and forecast larger capital costs after the close on Wednesday. Bloomberg reported on Thursday that the Facebook and Instagram parent was targeting at least US$25 billion in a bond sale.
Also weighing on equities was a 2.9 percent decline in Microsoft following its quarterly earnings.
Those declines overshadowed a 3.1 percent climb in Google parent Alphabet as its earnings beat expectations due in part to strong artificial intelligence demand.
"We saw there's questions on how much spending on the companies that released yesterday, that's going to pull the index down. It's a big, sizable chunk of the index," said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California.
Goldman said that as the market has rallied strongly since April he has been expecting a pullback, which he sees as a buying opportunity.
After the closing bell, fellow heavyweight Amazon surged about 10 percent following its quarterly results and outlook while Apple was still poised to post its earnings.
Markets are pricing in a 72.8 percent chance of a 25 basis point cut at the Fed's December meeting, down from more than 90 percent a week ago, according to CME's FedWatch Tool.
The Dow Jones Industrial Average fell 109.88 points, or 0.23 percent, to 47,522.12, the S&P 500 fell 68.25 points, or 0.99 percent, to 6,822.34 and the Nasdaq Composite fell 377.33 points, or 1.57 percent, to 23,581.14.
MSCI's gauge of stocks across the globe lost 9.27 points, or 0.91 percent, to 1,005.15 and was on track for its largest daily percentage drop since October 10, while the pan-European STOXX 600 index closed down 0.1 percent.
The European Central Bank kept interest rates unchanged at 2 per cent for the third meeting in a row and offered no hints about future moves as it enjoys a rare period of low inflation and steady growth, despite trade turbulence.
In currencies, the dollar index, which measures the greenback against a basket of currencies, advanced 0.39 percent to 99.51, with the euro down 0.27 percent at US$1.1568. Sterling weakened 0.36 percent to US$1.3146.
The dollar strengthened 0.87 percent to 154.04 yen after the Bank of Japan kept interest rates steady. Investors had expected a more hawkish tone from Governor Kazuo Ueda, even as he sent the strongest signal yet that a rate hike was possible as soon as December.
The yield on benchmark US 10-year notes rose 3.1 basis points to 4.089 percent after jumping 7.5 bps on Wednesday following Powell's comments, its biggest daily climb since Jul 11.
The 2-year note yield, which typically moves in step with rate expectations for the Fed, advanced 2 basis points to 3.606 per cent after a 9.2 bp increase on Wednesday, its biggest since Jul 3.
US crude settled up 0.15 per cent at US$60.64 a barrel and Brent advanced to US$65 per barrel, settling up 0.12 per cent on the day as investors gauged the US-China trade deal.
