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26.10.2023 03:10 PM
US premarket on October 26: US stock market continues its sharp decline

US stock futures opened lower following the release of several corporate reports from major American companies. S&P 500 futures dropped 0.8%, while the tech-heavy NASDAQ plummeted by 1.0%.

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Meta Platforms Inc., the parent company of Facebook, saw its shares fall by 4% in premarket trading due to poor performance and concerns about the uncertain economic climate. Google Alphabet Inc. stocks slid 1.8%, intensifying the selloff after disappointing cloud revenue results. Shares of Amazon.com Inc., set to report earnings after the market closes, fell by 1.2%.

Bearish sentiments spread globally: European and Asian stocks also suffered significant losses. The US dollar strengthened, gold increased by 0.6%, and Treasury bond yields approached 5%. The yen moved above 150, fueling speculations of government intervention in the currency market.

Clearly, the earnings season is not meeting expectations. Profit figures are slowing rapidly, and future projections are not comforting to investors. Mere good results are no longer sufficient to drive stock market growth and achieve yearly highs. In recent days, the market value of major US tech companies plunged by $200 billion, causing market tremors.

Today, the focus is on macroeconomic data. Reports on US unemployment claims and third-quarter GDP figures are expected.

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Meanwhile, oil prices are falling amid the strengthening US dollar. It remains relatively high, likely spurring inflationary pressures in the consumer price index. Bitcoin also pulled back after failing to break through the level of 35,000.

Regarding the S&P 500 index, demand could resurge following strong US GDP data. Bulls should defend $4,143 and reclaim $4,175. This move could halt the bearish trend, paving the way for a surge to $4,203. Controlling the $4,229 is equally vital for bulls, bolstering their stance. If the index drops amid risk aversion, bulls will have to protect $4,143. A break below could quickly push the index down to $4,114 and $4,091.

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