Financial Markets                      10/30 15:29

   

   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.

   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.

   ___

   AP Business Writers Teresa Cerojano and Matt Ott contributed.

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