The Dow Jones is down 0.47% at 48,784 points, the S&P 500 is off 1.03% at 6,906 points after briefly topping the 7,000 mark yesterday-a record level. The Nasdaq Composite is seeing a much sharper decline, down 1.93% at 23,397 points.

Traders are therefore reacting on a case-by-case basis to results from heavyweight US listings. If the Nasdaq Composite is posting such a steep drop, it is mainly due to its tech-heavy makeup: the slide in Microsoft (-11.65% at $425.68) is weighing heavily and is only partly offset by Meta's surge (+7.71% at $720.30). The former has a market capitalization of nearly $3.2 trillion, while the latter is "much” smaller at $1.8 trillion.

Shares in the company founded by Bill Gates are being punished despite earnings that beat expectations. Investors took a dim view of the slowdown at Azure, where cloud growth disappointed. They are also worried about surging AI-related costs.

Meta also posted better-than-expected quarterly results, driven in particular by the integration of AI into its content recommendation and ad-targeting algorithms, which has significantly boosted user engagement and revenue per advertiser. Mark Zuckerberg's group is also benefiting from the success of physical products such as its connected glasses. In short, Meta is currently seen as the company that monetizes AI best and fastest.

Alongside Microsoft and Meta, a third member of the Magnificent Seven has reported: Tesla (-3.31% at $415.80). Elon Musk's company posted quarterly profit above estimates, but its annual revenue declined-the first time since the company was founded. Investors are also concerned about the announcement of $20 billion in investment spending for 2026 and beyond.

Amongst other major companies to report earnings are IBM (+4.74%), Lockheed Martin (+5.42%), Caterpillar (+1.17%) and Honeywell (+4%).

More results are also due after the close tonight, including Apple, Visa and Western Digital...

A Fed with no surprises

In the news, last night the US Federal Reserve left rates unchanged, as was widely expected by the financial community. It is expected to maintain the status quo at least until the end of Jerome Powell's term (May 15, 2026).

At his press conference, he acknowledged that inflation has stabilized around 2.5%-2.7%, while noting that returning to the 2% target remains difficult. He also said the labor market was remarkably resilient.

Donald Trump's reaction was not long in coming. On his social network, the US president wrote: "Jerome ‘Too Late' Powell has once again refused to cut interest rates, even though he has absolutely no reason to keep them at such a high level. He is harming our country and its national security. We should have much lower rates today, especially since even this idiot now admits that inflation is no longer a problem or a threat.”

On the macroeconomic front, weekly initial jobless claims came in at 209,000, down 1,000 from a week earlier. However, analysts had been looking for a sharper drop to 205,000.

At the same time, the US trade balance deficit widened more than expected. It came in at $56.8bn, versus $29.2bn previously and a forecast of $40.5bn.

Finally, factory orders jumped 2.7% in November, compared with expectations for an increase of just 1.6%.

In currency markets, the dollar is rising (+0.48%) against the greenback and is trading at 0.8390 euro.

Bitcoin is losing ground (-1.45%) and is trading at $87,885.70.

Finally, the price of a barrel of WTI crude is up sharply (+2.48%) at $64.96, supported by tensions between the United States and Iran. Naval forces from the Revolutionary Guards have scheduled live-fire drills in the Strait of Hormuz on February 1 and 2.