US stock markets will offer a negative lead for the S&P/ASX 200 (INDEXASX: XJO) today as all three benchmarks were weighed down by the consumer discretionary sector.
The Dow Jones dropped 0.7%, the S&P 500 fell 1.2% and the Nasdaq detracted 1.9%, with healthcare and utilities the only sectors to outperform.
The biggest driver was a 9% fall in Walmart (NYSE: WMT) shares after the company missed earnings expectations and flagged weaker spending on the back of higher inflation. This has resulted in mass discounting and an immediate hit to profit.
Microsoft & Alphabet miss earnings expectations
Both Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) reported after the market close and both failed to meet expectations.
Alphabet posted 13% revenue growth for the second quarter, with YouTube revenue lifting by 5% and Google Cloud revenue growth decelerating to 36%. The company recently completed a 20-for-1 stock split, with Alphabet shares closing the session at US$105.
Turning to Microsoft’s fourth-quarter results, the company posted revenue growth of 12%, its slowest quarter since 2020, against a backdrop of foreign exchange headwinds.
Shopify share price whacked
Shopify (NYSE: SHOP) shares tanked another 15% overnight, adding to a more than 70% fall after the company flagged slowing growth and plans to lay off more than 10% of its workforce.
In a memo to staff, CEO Tobi Lütke admitted his bet that the pandemic would permanently propel the e-commerce industry ahead 5 to 10 years did not pay off. Instead, he said the mix of retail spending between e-commerce and in-store looks like it’s reverting back roughly to pre-pandemic levels.
Back home on the ASX, the ASX 200 is set to follow US stock markets lower at the open this morning. For a round-up of the latest news, check out my ASX 200 morning report.