US stocks sink as Wall Street sees both good and bad in Big Tech
profits, US-China relations
[October 31, 2025] By
STAN CHOE
NEW YORK (AP) — The U.S. stock market sank from its record heights on
Thursday, as Wall Street sifted through mixed developments on everything
from the U.S.-China trade war to profits for Big Tech behemoths.
The S&P 500 fell 1% and pulled further from its all-time high set on
Tuesday. The Dow Jones Industrial Average slipped 109 points, or 0.2%,
and the Nasdaq composite dropped 1.6% from its record set the day
before.
Stock markets elsewhere in the world were mixed, coming off a highly
anticipated meeting between the leaders of the world’s two largest
economies. U.S. President Donald Trump hailed his talk with China’s
leader, Xi Jinping, as a “12” on a scale of zero to 10, and Trump said
he would cut tariffs on China. But while the talks may offer some
stability for the near term, major tensions remain between the two
countries.
Plus, stocks had already run to records earlier this week on
expectations for potentially big improvements coming out of the Trump-Xi
talks.
“The result was fine, but fine isn’t good enough given the expectations
going in,” said Brian Jacobsen, chief economist at Annex Wealth
Management. “The results were more like small gestures instead of a
grand bargain.”
Also feeling the burden of high expectations were some of Wall Street’s
most influential stocks.
Meta Platforms dropped 11.3%, cutting into what had been a 28.4% jump
for the year so far, and was the heaviest weight on the S&P 500.
Analysts said investors were likely perturbed by how much Facebook’s
parent company said it’s planning to spend in 2026. Companies across the
industry have been on an investment spree to build out their
artificial-intelligence capabilities, and the concern is whether it will
all pay off.
Microsoft sank 2.9% even though it reported stronger profit and revenue
for the latest quarter than analysts expected. Analysts pointed to how
it also expects to spend more on investments in 2026 than in 2025, while
growth for its Azure business may have fallen a bit short of some
investors’ expectations.
On the winning side of Big Tech was Alphabet. Shares of Google’s parent
company climbed 2.5% after its profit and revenue for the latest quarter
easily topped analysts’ expectations.
How such companies do matters incredibly for investors. The trio of
Alphabet, Meta and Microsoft alone account for 14.5% of the total value
of all the companies in the S&P 500 index, which dictates the movements
for many 401(k) accounts. That means movements for them and a handful of
other Big Tech companies can easily overshadow what hundreds of other
stocks are doing.
Elsewhere on Wall Street, Chipotle Mexican Grill tumbled 18.2% after the
restaurant chain pointed to pressures weighing on its customers,
particularly younger ones and those who aren’t making high incomes. CEO
Scott Boatwright said that households making less than $100,000 are
dining out less often because of concerns about the economy and
inflation.
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Options trader Steven Rodriguez works on the floor at the New York
Stock Exchange in New York, Wednesday, Oct. 29, 2025. (AP Photo/Seth
Wenig)
 He pointed specifically to 25- to
35-year-old customers, who are feeling the weight of unemployment,
increased student loan repayments and slower growth in wages with
respect to inflation, and he said he thinks restaurants across the
industry are seeing something similar. Chipotle cut its forecast for
an important underlying measure of sales growth this year.
Eli Lilly, meanwhile, rose 3.8% after delivering stronger profit and
revenue for the latest quarter than analysts expected. It credited
strong growth for its blockbuster Mounjaro and Zepbound drugs for
diabetes and obesity, and it raised its full-year forecasts for
revenue and profit.
All told, the S&P 500 fell 68.25 points to 6,822.34. The Dow Jones
Industrial Average dipped 109.88 to 47,522.12, and the Nasdaq
composite sank 377.33 to 23,581.14.
In the bond market, Treasury yields held relatively steady as
traders continued to pare expectations that the Federal Reserve will
cut its main interest rate in December.
Traders are still betting on it as likely, according to data from
CME Group, but no longer as a near certainty. That’s after Fed Chair
Jerome Powell admonished markets on Wednesday, saying a December cut
“is not a foregone conclusion — far from it.”
The Fed has lowered its main interest rate twice this year in hopes
of boosting the slowing job market. But officials have also said
they may have to halt cuts if inflation accelerates beyond its
still-high level, because lower rates can worsen inflation.
The yield on the 10-year Treasury held at 4.08% where it was late
Wednesday, up from 3.99% the day before Powell’s warning.
In stock markets abroad, indexes dipped by 0.5% in France and by
less than 0.1% in Germany after the European Central Bank decided
not to move its main interest rate.
Tokyo’s Nikkei 225 edged up by less than 0.1% after the Bank of
Japan likewise held interest rates steady.
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AP Business Writers Teresa Cerojano and Matt Ott contributed.
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