US Stocks Mixed as Investors Digest Big Tech Earnings

Market Overview

US stocks traded mixed at the close on Thursday as investors digested mixed earnings results from tech giants Microsoft (MSFT), Meta (META), and Tesla (TSLA). The Nasdaq Composite (^IXIC) dipped 0.65%, while the Dow Jones Industrial Average (^DJI) gained 0.11%. The tech-heavy Nasdaq Composite (^IXIC) dipped 0.4% as shares of Microsoft (MSFT) plunged 6% after the software giant's quarterly results disappointed.

Earnings in Focus

Investors eagerly anticipated earnings reports from tech heavyweights following the Federal Reserve's decision to maintain interest rates unchanged. Microsoft's quarterly results missed analyst expectations, causing its stock to sink. Meta's quarterly earnings beat helped lift its shares, but it also signaled challenges ahead for Big Tech due to concerns over AI development. Apple (AAPL) is expected to release its earnings after the bell, and investors will closely monitor its iPhone sales performance.

Other Market Movers

Mastercard (MA) stock jumped to record highs after the credit card company's profit exceeded expectations. Intel (INTC) and Visa (V) are also due to report earnings after the bell. The Bureau of Economic Analysis's estimate showed that the US economy grew at an annualized pace of 2.3% in the fourth quarter, below economists' forecasts.

AI Focus

The investment rationale for Big Tech companies' massive AI investments was questioned after DeepSeek's cheaper AI model challenged assumptions about the likelihood of a payoff in the field. Companies like Microsoft (MSFT), Google (GOOG, GOOGL), Amazon (AMZN), and Nvidia (NVDA) are pushing AI agents as the next major step in AI evolution.

Aviation Incident

American Airlines (AAL) CEO Robert Isom expressed condolences after a collision between an American passenger jet and a US army helicopter, resulting in no survivors.

Economic Data

The Bureau of Economic Analysis's preliminary estimate of fourth-quarter gross domestic product (GDP) showed the US economy grew at an annualized pace of 2.3%, below the 2.6% expected by economists. Consumer and government spending drove economic growth, while investment declines offset some gains. For the year, the US economy grew at 2.8%, slightly below the 2.9% seen in 2023.

Economic Calendar

* Personal consumption (fourth quarter advance estimate)
* Initial jobless claims (to Jan. 25)