US sharemarkets weakened overnight as earnings season gathered steam, with inflation, higher input and raw materials costs beginning to worry investors.
The Dow Jones was weakest, down 0.5% while the Nasdaq fell 0.3% despite big tech reporting healthy profits.
President Biden continued his sweeping tax reform agenda, highlighting an increased top marginal tax rate for the rich as he seeks to fund tax cuts and free child care for the low and middle-income earners.
Cloud & Xbox a boon for Microsoft
Shares in Microsoft (NASDAQ: MSFT) fell despite beating expectations for a ninth straight quarter and reporting a 19% increase in sales.
Microsoft’s Azure platform, used by businesses large and small, saw sales increase 50% as the digitalisation trend continues, whilst cloud computing sales continued at an incredible 33% as they continue to gain market share. This led to a doubling of profit to US$15.5 billion.
Xbox and personal computing sales remain capped by the global chip shortage, yet the former jumped 232% following the latest platform release in late 2020.
Google powers ahead
Alphabet (NASDAQ: GOOGL) is looking to be one of the biggest beneficiaries of the pandemic reopening after the company reported a 35% increase in quarterly revenue to US$45.6 billion as advertising sales boom in a post-COVID, consumer-led economy.
Impressively, YouTube ads jumped 49% compared to the year-ago period to US$6 million, while the Google Cloud business reported 46% revenue growth to US$4 billion. Alphabet stock finished 3.0% higher on the news.
US stock market movers
In the thick of earnings season, here’s how other popular US stocks performed during Wednesday’s session:
- Visa (NYSE: V) up 1.5%
- Amazon (NASDAQ: AMZN) up 1.2%
- Facebook (NASDAQ: FB) up 1.2%
- Starbucks (NASDAQ: SBUX) down 3.2%
- Spotify (NYSE: SPOT) down 12.3%
- Pinterest (NYSE: PINS) down 14.5%
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is expected to open higher on Thursday despite the weak lead from US markets. For all the latest, check out Rask Media’s daily ASX 200 report.
