Goldman Sachs sees US stocks dip on tech earnings and macro shifts

US stocks experienced a slight decline on Friday as investors processed earnings from key tech firms, market instability, and conflicting economic data, including soaring oil prices and declining interest rates. The semiconductor industry and chip equipment producers suffered double-digit declines in October due to ongoing discussions about the viability of AI infrastructure investments.

Microsoft's stock increased during the month, Amazon stayed unchanged, while Alphabet's stock fell, despite challenges faced by AI-related suppliers. Brent crude oil prices surged by roughly 6% this week, climbing to nearly wartime levels, fueled by tensions between the US and Iran. The 10-year Treasury yield fell below 5% for the first time since the Federal Reserve increased rates in September, as higher oil prices shifted concerns towards potential economic slowdown rather than inflation.

Goldman Sachs predicts an additional interest rate increase during the December Federal Open Market Committee meeting, though the possibility of no further hikes remains. The bank's assessment suggests that inflation is presently temporary and transitory, according to research published this week. Major tech companies, including Amazon, Alphabet, and Microsoft, are set to release earnings reports next week.

The third-quarter earnings season anticipates 27% year-over-year earnings per share growth for the S&P 500 (INDEX:SPX) and 9% for the average company. The midterm elections are scheduled for November 3. This report was generated with artificial intelligence assistance and reviewed by an editor.