Nasdaq leads sell-off after Microsoft, Meta earnings prompt Big Tech slide

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The Nasdaq led a tumble in US stocks on Thursday after Meta (META) and Microsoft (MSFT) earnings sparked worries about prospects for Big Techs amid rising artificial intelligence costs.

The tech-heavy Nasdaq Composite (^IXIC) sank 2.7%, while the S&P 500 (^GSPC) fell nearly 1.9%, as both indexes ended the month slightly in the red. The Dow Jones Industrial Average (^DJI) also notched a monthly loss after dropping 0.9% on Thursday.

The monthly declines snapped five straight months of gains for the S&P 500 and Dow.

Optimism for a Big Tech boost to stocks took a knock as investors digested Meta's and Microsoft's quarterly reports. While the results beat Wall Street estimates, both companies flagged that they will step up already high spending on AI infrastructure.

Concerns that would put pressure on profitability helped send shares in both Meta and Microsoft lower.

The unsettled mood spread to Amazon (AMZN) and Apple (AAPL), which rounded off this week's "Magnificent Seven" earnings with reports after the close on Thursday. AI darling Nvidia (NVDA) also fell over 4.5%.

After the bell, the mood around Amazon improved, as its stock popped after the tech giant topped Wall Street's estimates for both revenue and earnings per share. Meanwhile, Apple shares slid slightly as a one-time charge related to the reversal of a European General Court decision weighed on the company's earnings per share.

On the macroeconomic front, investors received the latest reading on the Personal Consumption Expenditures index, which largely matched expectations. The reading is the last key inflation input for the Federal Reserve before its policy decision next week.

In jobs-related data, initial jobless claims declined to a five-month low of 216,000, lower than estimates. Next up is the all-important jobs report on Friday.

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