Nasdaq Futures Fall, Meta Continues To Plummet

Nasdaq futures dropped Thursday as Wall Street provided a mixed picture of strong earnings from some blue-chip stocks and disappointing drops from Big Tech topped off by Meta’s 21.7% fall in premarket trading.

“So far Meta is just the latest big tech company to disappoint. After a steady start to the U.S. third-quarter earnings season, things are starting to look a lot less rosy,” Laith Khalaf, head of investment analysis at AJ Bell, said.

Meta is the parent company of Facebook, and the company’s 21.7% fall in premarket trading represents about $75 million taken away from its market value. Meta had a drop in third-quarter profit as well as a weak holiday quarter forecast.

According to CNBC, Meta shares are down by more than 61%, a downward trend that CEO Mark Zuckerberg expects to continue in the fourth quarter. Zuckerberg continues to preach patience as he “reiterated his commitment to spending billions of dollars developing the metaverse,” a promise that has so far resulted in a $9.4 billion loss year-to-date for Meta’s Reality Lab Unit.

At the same time that Nasdaq futures were sinking, Dow futures rose amid a handful of positive earning reports. Blue chip stocks including McDonald’s, Caterpillar, Honeywell, and Merck & Co. Inc all rose as Meta, Microsoft, and Alphabet Inc. went in the opposite direction.

A 75 basis point rate hike by the Fed is probable at the start of November, many experts are hoping for a smaller rate hike after the December meeting. If the rate hike is 50 points or less in December, that would be a good sign to investors that the consecutive rate hikes are working, at least for the short term.

If the Fed continues to raise rates, however, many experts fear a spike in unemployment or an even deeper recession than what the U.S. is experiencing right now.

According to CNBC, the third-quarter data showed that the U.S. economy grew at 2.6% annualized rate in the July to September quarter, a better than expected result and the first growth the economy has seen in 2022. To most economists, the definition of a recession is when the GDP shrinks for two consecutive quarters, a phenomenon that happened from January to June of this year.