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Tech stocks tumble as earnings highlight diverging fortunes

US equity markets retreated on Thursday, led by sharp declines in major tech shares after Meta’s hefty AI investment unsettled investors, while Amazon and Apple both posted better-than-expected results that buoyed after-hours sentiment. In Asia, Japanese stocks climbed to a new record on Friday following robust inflation data and easing US-China tensions, whereas Chinese equities declined as manufacturing activity contracted more sharply than expected in October, pointing to ongoing weakness in the world’s second-largest economy. European shares edged lower after the ECB kept interest rates unchanged and data signalled resilience in services despite continued sluggishness in German GDP and employment. Meanwhile, commodity markets were mixed, with gold and oil both easing on Friday after the US dollar strengthened midweek.

Date October 31, 2025
Author Shane Strowmatt, Senior Investment Writer
Reading time 5 minutes

Major US share indices closed with losses on Thursday as heavy investment plans by Facebook and Instagram owner Meta in artificial intelligence unsettled investors. The S&P 500 dropped by 1% to 6822.34 points and the tech-focused Nasdaq 100 slid by 1.5%, ending the recent rally sparked earlier this week. Shares in Meta plunged 11.3% after announcing capital expenditure could reach up to USD 72 billion this year with even higher spending planned for 2026, while Microsoft also declined despite strong results due to cloud growth failing to impress investors. Meanwhile, the Dow Jones Industrial Average slipped 0.2% after briefly surpassing the 48,000-point mark for the first time in its history, as additional news included progress but no breakthrough in US-China trade talks and fresh commentary from Federal Reserve Chair Jerome Powell tempering hopes for a further rate cut this year.

Amazon and Apple surpass earnings forecasts

Amazon and Apple both reported better-than-expected results on Thursday, as the leading US tech firms benefited from continued strength in key business areas. Amazon delivered third-quarter earnings per share of USD 1.95 and revenue of USD 180.2 billion, with its cloud division AWS generating USD 33.01 billion and rapid growth in its Trainium2 AI chip business; shares advanced more than 12% in after-hour trading. Apple posted fourth-quarter earnings per share of USD 1.85 on revenue of USD 102.5 billion, topping forecasts, even as iPhone sales at USD 49.03 billion and revenue in China narrowly missed market expectations; Apple shares rose 2.6% after the bell as upbeat guidance from CEO Tim Cook overshadowed regional weakness. Both companies highlighted ongoing investment in artificial intelligence and cloud technologies to sustain momentum into the year ahead.

China manufacturing contracts to six-month low

China’s manufacturing sector contracted more sharply than anticipated in October, with the official purchasing managers’ index falling to 49.0, down from 49.8 in September and marking its lowest level in six months, according to data released on Friday. This result missed market expectations and contrasts with earlier signs of recovery, as declines were seen across production, new orders, inventories, and employment. The non-manufacturing PMI rose modestly to 50.1, aided by robust activity in services during the Golden Week holiday, while the composite figure slipped to its lowest since December 2022. The ongoing manufacturing slowdown was attributed to subdued domestic demand, a persistent property downturn, and a weeklong factory shutdown, despite a partial easing of US-China trade tensions this week. Mainland China’s CSI 300 was trading down 1.3%, while Hong Kong’s Hang Seng Index was 1% lower. Other markets in the Asia-Pacific region were mixed Friday. Korea’s Kospi 0.5% was trading higher. Australia’s S&P/ASX 200 was essentially flat.

Japan stocks climb to record high

Japanese equities led Asian markets higher on Friday, with the Nikkei 225 rising 2.3% to a new all-time high as investors welcomed easing tensions between the US and China after a meeting between US President Donald Trump and President Xi Jinping. In macroeconomic data, Tokyo’s consumer price index inflation accelerated to 2.8% year-on-year in October, higher than the 2.5% in September and above the 2.6% expected, government data published on Friday showed. Both the core CPI, which excludes fresh food, and a further measure excluding fresh food and energy, also climbed to 2.8%, remaining well above the Bank of Japan’s 2% target. The continued rise was driven by persistent food price increases and robust discretionary spending. The data, typically a bellwether for wider trends in Japan, keeps focus on the possibility of future Bank of Japan rate hikes after officials left rates unchanged earlier in the week.

ECB holds rates steady as economy grows

The European Central Bank kept its key deposit facility rate unchanged at 2% for a third meeting in a row on Thursday, as euro-area inflation edged up to 2.2% in September from 2% in August. Preliminary data showed the euro area's economy expanded by 0.2% in the third quarter, outperforming forecasts and highlighting underlying resilience amid global uncertainty and increased US tariffs. Meanwhile, seasonally adjusted unemployment rate was 6.3% in September, unchanged both from August and from the same period last year, according to Eurostat data also released separately from the ECB on Thursday. ECB President Christine Lagarde said ongoing strength in services continues to offset weakness in manufacturing, and reiterated that monetary policy will remain data dependent. Top ECB policymakers signalled the rate-cutting cycle is probably at - or near - its end, with further changes ruled out unless warranted by new developments. European stock indices finished slightly weaker on Thursday. The Euro Stoxx 50 slipped 0.2%, while Germany’s DAX was little changed. France’s CAC 40 fell 0.5%.

Swiss economic outlook improves in October

The KOF Economic Barometer for Switzerland increased by 3.3 points to 101.3 in October, remaining above its medium-term average, according to data released on Thursday. The brighter outlook was driven by positive indicators from manufacturing, finance and insurance, and other services, although consumer demand showed some weakness. The update also included an annual revision, expanding the range of indicators and incorporating recent GDP data from the State Secretariat for Economic Affairs. Within manufacturing, strong gains were noted in sectors such as electronics and metals, while prospects worsened for chemicals, pharmaceuticals, and food producers. The Swiss Market Index lost 0.1% on Thursday.

German GDP unchanged in third quarter

Germany’s gross domestic product remained flat in the third quarter of 2025 compared with the previous quarter, following a revised 0.2% contraction in the second quarter, figures released on Thursday show. Year-on-year, GDP increased by 0.3% after price and calendar adjustment, as investment in machinery and equipment grew but exports weakened. The Federal Statistical Office noted that the economy’s lack of momentum at the start of the second half reflects persistent sluggishness. Detailed third-quarter data will be published later in November.

German employment edges down in September

Germany saw a slight decrease in seasonally adjusted employment in September, with the number of employed residents falling by 21,000 from August, marking the fifth monthly decline, according to official data released on Thursday. On a non-adjusted basis, employment rose by 150,000, but this seasonal uptick was considerably smaller than seen in previous years. Compared to September 2024, employment was down by 46,000, while the adjusted unemployment rate rose to 3.9%, as the number of unemployed increased both month-on-month and year-on-year. The subdued labour market performance signals ongoing headwinds in the German economy despite the typical autumn boost in jobs.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from AbbVie, BYD, Chevron, Exxon Mobil, Intesa Sanpaolo, and Linde.

Economic data in focus: Swiss retail sales (08:30), German retail sales (08:00), French Consumer Price Index (08:45), Italian Consumer Price Index (11:00), euro-area Consumer Price Index (11:00), Canadian gross domestic product (13:30) and US personal consumption expenditures (13:30).

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