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Tech stocks are taking a beating this week as they prove less resilient to the economic downturn than investors had hoped they would be.
What’s Happening: Dreary earnings results from Google parent company Alphabet
(GOOG) and Microsoft
(MSFT) weighed down markets on Wednesday, showing how this year’s $5.5 trillion selloff has not yet bottomed out. The tech-heavy Nasdaq ended the day down 2%. Then, Facebook parent company Meta Platforms
(FB) reported weaker-than-expected results after market close, sending its shares down 20% in premarket trading.
The big picture: We’re in the thick of third-quarter earnings season, and so far, things haven’t been too bad. Major banks mostly met or beat expectations, and Netflix
(NFLX), which took a walloping earlier in the year, even showed a nice rebound. Markets rallied late last week into early this week on that earnings momentum.
But disappointing earnings from Big Tech stocks have the tendency to turn the broader market south thanks to their immense market value.
Beyond determining market sentiment, tech earnings also offer important clues about where the economy is heading. That’s because the forward-looking, multinational industry is particularly sensitive to inflation, rising interest rates and a strong dollar.
So far, what we’re …….