US stock markets were mixed on Wednesday, with the Nasdaq finishing flat but the Dow Jones and S&P 500 falling 0.7% and 0.5%, respectively, after another solid earnings update from the tech giants. An unexpected division to cancel bond purchases and potentially hike the cash rate by the Canadian central bank sent US bond yields sliding the most in several months, supporting tech valuations.
But it was all about earnings with both Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) flexing their muscles once again.
Microsoft breaks records
Microsoft reported quarterly revenue exceeding US$40 billion for the first time ever as cloud sales jumped by a third in the quarter alone.
Earnings hit US$20 billion as margins improved and both the Azure cloud and personal computing businesses contributed to the bottom line.
Management was quick to stress the deflationary impact of technology in driving down business costs amid a period of inflation. Microsoft shares finished 4% higher.
Alphabet posts 40% revenue growth
Alphabet also beat expectations, gaining 5% after nearly doubling earnings during the quarter following another 41% increase in advertising revenue.
The company has shown its greater resilience compared to Facebook (NASDAQ: FB) and Snapchat (NSYE: SNAP) which are being impacted by Apple’s recent privacy changes.
US stock market movers
Here’s how other popular US stocks performed overnight.
- Spotify (NYSE: SPOT) up 8.3%
- Tesla (NASDAQ: TSLA) up 1.9%
- Mastercard (NYSE: MA) down 6.0%
- Visa (NYSE: V) down 6.9%
- Robinhood (NASDAQ: HOOD) down 10.4%
- Twitter (NYSE: TWTR) down 10.8%
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is set to open lower on Thursday. For a round-up of the latest news, check out my ASX 200 morning report.