S&P 500 Retreats As Meta Nosedives 24%

The Tech Sector Is Continued Weak

The S&P 500 dropped as tech stocks kept falling approaching the 3805 support level. A dismal earnings report from Meta yesterday added to the strain on the IT sector's market mood. The Nasdaq, which has a strong tech component, fell 1.6% during today's trade.

Treasury rates kept falling, and the yield on 10-year Treasuries finally dropped below the crucial 4.00% mark. However, as traders concentrated on the sell-off in tech companies, lower Treasury rates did not enough help the S&P 500.

Investors should be aware that the S&P 500's recent good performance was mostly driven by top tech firms like Meta. Bulls of the S&P 500 should be unhappy with the latest market sell-off. Due to the market's increased concentration, it is unlikely that the S&P 500 will see sustained upward momentum as long as mega sized companies are under pressure.

Today's top gainer was Caterpillar, whose shares increased 8% as the company's profits and sales handily above analyst expectations.

The publication of Amazon's third-quarter report has caused the stock to decline by 19% in the post-market session, and it seems that the S&P 500 may face more pressure tomorrow. According to GAAP, Amazon reported sales of $127.1 billion and profits per share of $0.28.

Although the company's GAAP profits exceeded analyst expectations, they also included a pre-tax valuation gain of $1.1 billion from the investment in Rivian's common shares. According to the corporation, fourth-quarter sales will be between $140 billion and $148 billion, up 2-8% over the same period in 2021.

Amazon anticipates reporting operating income of $0 to $4.0 billion for the fourth quarter. The big sell-off in the post-market session is mostly caused by the inadequate guidance.

Traders should be aware that Apple will also report its earnings today, and those numbers might materially affect how the S&P 500 behaves.