Concerns Over AI Spending Weigh on Stocks

Economic Indicators - US November factory orders increased by +2.7% month-over-month, surpassing expectations of +1.6% and marking the largest increase in six months [2] - The US November trade deficit widened to -$56.8 billion, exceeding expectations of -$44.0 billion and representing the largest deficit in four months [2] - Weekly initial unemployment claims fell by -1,000 to 209,000, indicating a slightly weaker labor market than the expected 205,000, while continuing claims decreased by -38,000 to a six-month low of 1.827 million, showing a stronger labor market than the expected 1.850 million [2] Stock Market Performance - The S&P 500 Index fell by -1.02%, the Dow Jones Industrial Average decreased by -0.30%, and the Nasdaq 100 Index dropped by -1.69% [5] - Microsoft shares plummeted more than -12% due to disappointing growth in its cloud business, negatively impacting the broader market, particularly the Magnificent Seven technology stocks [4][12] - Meta Platforms saw an increase of more than +7% after providing a stronger-than-expected revenue outlook, contributing positively to the market [3][17] Earnings Reports - 81% of the 106 S&P 500 companies that have reported earnings thus far have exceeded expectations, with S&P earnings growth projected to rise by +8.6% in Q4 [7] - Meta Platforms reported Q4 revenue of $59.89 billion, surpassing the consensus of $58.42 billion, and forecasted Q1 revenue between $53.5 billion and $56.5 billion, well above the consensus of $51.27 billion [17] - International Business Machines reported Q4 revenue of $19.69 billion, exceeding the consensus of $19.21 billion, leading to a more than +6% increase in its stock [18] Sector Movements - Energy producers rallied as WTI crude oil prices rose more than +4% to a 4.25-month high, benefiting companies like ConocoPhillips and Marathon Petroleum, which saw increases of more than +3% [14] - Cryptocurrency-exposed stocks fell, with Bitcoin down more than -5% at a 1.75-month low, impacting companies like Coinbase and Marathon Digital Holdings [13] - Las Vegas Sands led the S&P 500 losers, down more than -14% after reporting weaker-than-expected Q4 results for its Macau operations [15]