Australia

Australian shares are set to fall slightly at the open, after the US market saw another bad day for big tech stocks, and GDP data pointing to a hotter economy.

ASX futures were down 0.04% or 3 points as of 8:00am on Friday, suggesting a lower open.

A pullback in megacap technology stocks deepened Thursday, dragging the Nasdaq Composite into its worst two-day decline of the year.

The tech-heavy index dropped 1.8%, while the S&P 500 shed 1.2%. The Dow Jones Industrial Average declined around 250 points, or 0.8%.

A recent round of quarterly earnings reports has tamped down this year's rally in big-tech shares. Third-quarter results from tech giants this week have mostly failed to impress investors, injecting volatility into the stock market. The S&P 500's year-to-date gains have shrunk to 7.8%.

In commodity markets, Brent crude oil fell 1.9% to US$88.43 a barrel while gold was flat at US$1,985.19.

In local bond markets, the yield on Australian 2 Year government bonds was higher at 4.39% while the 10 Year yield was also up at 4.87%. US Treasury notes were down, with the 2 Year yield at 5.04% and the 10 Year yield easing to 4.84%.

The Australian dollar hit 63.20 US cents up from the previous close of 63.05. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was flat at 100.77.

Asia

Chinese stocks closed higher, reversing morning losses as investors digested the impact of the latest fiscal stimulus measures on the economy. The benchmark Shanghai Composite Index rose 0.5% to 2988.30, the Shenzhen Composite Index gained 0.45% and the tech-heavy ChiNext Price Index added 0.65%. Auto and utility stocks led the gains. Chongqing Changan Automobile rose 4.1% and SAIC Motor put up 1.2%. China Yangtze Power advanced 1.9% and China National Nuclear Power rose 1.4%. Semiconductor stocks weighed on the market, with LONGi Green Energy Technology down 3.0% and Hygon Information Technology declining 1.4%.

Hong Kong shares closed lower amid mixed earnings. Standard Chartered slipped 11%, as exposure to China property cut into 3Q profits, while Li Ning shed 21% after it lowered full-year sales guidance. Among gainers, Huaneng Power International added 8.1% after it swung to a profit in 3Q, while Huadian Power International and China Resources Power added 6.4% and 4.1%, respectively. The benchmark Hang Seng Index ended 0.2% lower at 17044.61, while the Hang Seng Tech Index added 0.3% to 3712.55.

Japan's Nikkei Stock Average slipped 2.1% to close at 30601.78, dragged by losses in electronics and tech stocks amid risk-off sentiment spurred by rising US government bond yields and geopolitical tensions in the Middle East region. Advantest slid 6.9%, Disco Corp. dropped 5.4%, and Tokyo Electron lost 5.0%.

India's benchmark Sensex fell 1.4% to close at 63148.15. Although the Asian session kicked off quietly enough, "slowly but surely, dark clouds have begun to form to provide an ominous feeling that something could crack," says Matt Simpson, market analyst at City Index and FOREX.com, in an email, noting losses in US stock-index futures. Among the worst performers on the benchmark index, Mahindra & Mahindra slipped 4.1%, Bajaj Finance dropped 3.5% and Asian Paints (India) was down 3.4%. Tech Mahindra fell 2.25% after fiscal 2Q net profit dropped 62% on year.

Europe

European stocks dropped after the European Central Bank left eurozone interest rates unchanged. "Today's ECB decision confirmed our view that interest rates are likely to have reached a plateau," Daniele Antonucci, chief investment officer at Quintet Private Bank, writes. "But as the inflation battle isn't fully won yet, we expect the ECB to keep rates restrictive for some time." The Stoxx Europe 600 fell 0.5%, the CAC 40 slipped 0.4% and the DAX backtracked 1.1%, with automotive shares among the biggest fallers after downbeat third-quarter results from Mercedes-Benz. Oil shares traded mixed as Brent crude lost 1.9% to $88.43 a barrel.

The FTSE 100 closed down 0.8% Thursday weighed by Standard Chartered—which reported a 33% drop in third quarter pretax profit and was the session's biggest faller, down 12%. Furthermore, the latest GDP numbers from the US pointed to it being some time before the Federal Reserve cuts rates. Rentokil Initial and B&M European Value Retail were down 11% and 5% respectively. Ocado was the day's biggest riser, up 5.9%, followed by Croda International, up 1.8% and IAG, up 1.8% ahead of Friday's third-quarter earnings.

North America

A pullback in megacap technology stocks deepened Thursday, dragging the Nasdaq Composite into its worst two-day decline of the year.

The tech-heavy index dropped 1.8%, while the S&P 500 shed 1.2%. The Dow Jones Industrial Average declined around 250 points, or 0.8%.

A recent round of quarterly earnings reports has tamped down this year's rally in big-tech shares. Third-quarter results from tech giants this week have mostly failed to impress investors, injecting volatility into the stock market. The S&P 500's year-to-date gains have shrunk to 7.8%.

Shares of Meta Platforms fell 3.7% after the Facebook parent beat Wall Street expectations in its latest quarterly earnings report, but warned of softer advertising sales in the fourth quarter.

Google parent Alphabet's Class A shares dropped 2.7%. The stock has struggled since the tech titan reported disappointing cloud business growth after the market closed Tuesday. Microsoft lost 3.8% on Thursday, while Apple fell 2.5% and Nvidia shed 3.5%.

"A lot of these big tech and tech-like names have been priced for perfection," said John Lynch, chief investment officer for Comerica Wealth Management. "We're seeing imperfect performance."

The Nasdaq-100 index, tracking 100 of the largest nonfinancial stocks listed on the Nasdaq Stock Market, entered a correction Thursday after closing more than 10% below its July high. The Nasdaq Composite fell into a correction Wednesday.

Megacap tech stocks have also lost some of their luster as bond yields have climbed in recent weeks. The yield on the benchmark 10-year Treasury note, which climbed above 5% intraday on Monday for the first time in 16 years, eased to 4.843% on Thursday.

Investors parsed the US gross domestic product report for clues about the trajectory of the economy. Third-quarter GDP rose 4.9% from the year prior adjusting for seasonality and inflation, topping economists' forecast.

The stronger-than-expected GDP figure suggested consumers are keeping the economy churning, holding a recession at bay. Still, some investors wondered whether the third quarter marked a peak in growth. The report showed Americans saved less and their incomes fell when adjusted for inflation. Business investment stalled, too.

The level of consumer spending "isn't sustainable in the fourth quarter, " said Megan Horneman, chief investment officer at Verdence Capital Advisors. "The GDP report was a mixed bag."

The hot GDP growth rate renewed questions about whether the Federal Reserve is done with its interest-rate increases. Traders are betting the Fed will almost certainly hold its benchmark rate at current levels in its November policy meeting, but are pricing in a roughly 20% probability that the central bank will raise rates in December, according to CME Group's federal-funds futures.

Quarterly earnings reports also spurred swings elsewhere in the stock market. United Parcel Service shares fell 5.9% after the company cut its sales outlook, citing a slowdown in global demand for shipping. Comcast's stock slumped 8.4% after the company reported a loss in broadband subscribers. Meanwhile, International Business Machines shares jumped 4.9% after the company's profit and revenue topped analyst estimates.

The real-estate sector was the best-performing segment of the S&P 500, up 2.2%. American Tower rose 8.1%, the top gainer in the sector. The real-estate investment trust reported better-than-expected revenue and named its next CEO.

With about 42% of companies in the S&P 500 having reported third-quarter results, some 79% have topped analyst consensus estimates, according to FactSet. That compares with a five-year average of 77%.