Wall Street closed in red due to fears of a reheating of the trade war between the US and China

Wall Street closed in red due to fears of a reheating of the trade war between the US and China

In this context, the Dow Jones Industrial Average fell 0.71% to 46,590.41 points; The S&P500 lost 0.52% to 6,700.48 points and the Nasdaq Composite depreciated 0.93% to 22,740.40 points.

At the same time, a possible summit between Trump and the Russian president, Vladimir Putinwas postponed after Russian officials reportedly indicated there was no intention to end the ongoing war in Ukraine.

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Some good data from Tesla could change the mood of the market.

Investors are also paying attention to Friday’s US consumer price index, which could solidify expectations of a U.S. interest rate cut. Federal Reserve (Fed) at its October meeting.

Shutting down much of the federal government would complicate data flow and could cloud inflation signal. The stalemate, now entering its fourth week, has delayed or paused the release of key economic data, adding to uncertainty.

At the same time, a possible summit between Trump and the Russian president, Vladimir Putinwas postponed after Russian officials reportedly indicated there was no intention to end the ongoing war in Ukraine.

Featured Wall Street Stocks

Netflix shares plummeted 10% after announcing a 28% operating margin in the third quarterwhich missed Wall Street expectations, mainly due to charges related to a dispute with the tax authorities of Brazil.

Still, revenue and profits for the period grewdriven by the company’s best-ever quarter in advertising sales, along with an increase in subscribers and higher prices.

The toy company Mattel lost 2.7% and also disappointed investors after missing estimates and reporting lower sales in North America.

Elsewhere in Wednesday’s results list, telecommunications group AT&T lost 1.9% despite adding more mobile subscribers than expected in the third quarterthanks to the package plans and important promotions around the latest iPhone launch, which helped it attract more customers in a highly competitive market.

GE Vernova fell 1.5% after the energy transition company missed third-quarter profit estimates, despite revenue beating expectations thanks to strong order book growth.

The actions of Hilton Worldwide rose 3.4% after the hotel operator beat quarterly profit expectations, even after slashing its room revenue forecast for 2025, hurt by weak travel demand in the US.

Additionally, Apple shares fell 1.6% after Nikkei Asia reported that Apple has drastically cut production of the iPhone Air, due to supposedly weak buyer demand. The aforementioned media indicates that, although the iPhone Air had a very strong debut in China, the same was not recorded in other markets.

The Google matrixAlphabetgrew 0.4% on Wednesday and is recovering from Tuesday’s drop following the launch of the OpenAI browser and supported by important advances in quantum computing.

The recovery came as Google announced that its Willow quantum chip has demonstrated “the first algorithm to achieve a verifiable quantum advantage in hardware.”and runs 13,000 times faster than the world’s fastest classical supercomputers.

The results of the electric vehicle manufacturer tesla (-0.8%) will be released after the close, kicking off the long-awaited reports from mega-cap tech group “Magnificent Seven.”

Jim Chanos warns that AI spending reflects risks of the dotcom bubble

Short seller Jim Chanos sounds the alarm about the current financial cycle, describing it as “pretty extreme” after 16 years of bull market conditions in credit and stocks.

The director of Chanos and Company, compared the current capital spending boom in artificial intelligence to the internet expansion of the late 1990sand called AI “the displacement idea of ​​this cycle,” similar to how the internet dominated the tech landscape of the 1990s.

On Bloomberg TV, the veteran investor expressed particular concern about the huge flow of capital into AI infrastructure, which he suggests far exceeds the roughly $100 billion in vendor funding during the dot-com era. “I highlight how Major technology companies such as Nvidia and Microsoft are concerned about useful life, depreciation and some accounting aspects, as well as immense capital needs, figures that they do not want to put directly on their balance sheets.“Chanos explained.

He pointed to OpenAI as an example, noting that the company is expected to generate $13 billion in revenue this year and $30 billion next year, but faces “capital spending needs in the hundreds of billions of dollars”.

Chanos, who teaches a course on the history of fraud, warned that prolonged bull markets typically lead to lowered standards and erode confidence among investors. He identified early warning signs in areas such as subprime auto loans and called the First Brands case “mind-boggling, given what they were hiding.”

Source: Ambito

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