Can Microsoft and Meta Reach Their Previous Highs?

Highlights

• Microsoft posted its best quarterly results, seeing a notable surge in aftermarket trading.

• The S&P 500 and Nasdaq both showed mixed performance, with the tech sector showing resilience.

• Despite positive days, both the Vanguard Australian Shares Index ETF and iShares S&P 500 ETF are still down from their previous peaks.

The tech sector continues to play a dominant role in the broader market, as companies like Microsoft Corporation (MSFT) and Meta Platforms Inc (META) drive much of the recent market movement. On the global indices, the S&P 500 and Nasdaq have shown mixed results, reflecting a complex economic backdrop. While inflation figures remained relatively low, there were also signs of sluggish GDP growth, suggesting that economic conditions might be shifting in unforeseen ways.

Microsoft's Record-Breaking Performance

Microsoft has reported impressive growth, marking a significant milestone in its history. The company saw a robust year-on-year increase in both sales and profits, outpacing expectations. This marked the best quarterly results for Microsoft, leading to a substantial rise in its stock during after-market trading. The surge underscores the continued strength of Microsoft's business model, even in the face of broader market volatility. The impact of such results reverberates beyond just the tech sector, with investor sentiment boosting the performance of the broader Nasdaq index.

Meta's Strong Earnings Report

Meta Platforms, while not matching the scale of Microsoft's earnings, also exceeded expectations in its latest financial report. The company posted solid growth figures, prompting a healthy rise in its stock price after market hours. Meta's performance is notable for its resilience, as the company navigates challenges in its core social media business. The results reflect the ongoing ability of Meta to adapt and evolve, maintaining its dominant position in the global tech landscape despite increasing competition.

Local ETFs and Their Performance

Looking closer to home, ETFs tracking Australian and US markets have shown varying degrees of recovery since the market downturn triggered by global events. For example, the Vanguard Australian Shares Index ETF (VAS) has seen a modest recovery, but it remains down from its peak, reflecting broader market struggles. Similarly, the iShares S&P 500 ETF (IVV) continues to show a decline, despite recent positive days in the broader market. These ETFs are key barometers of market sentiment, especially for those exposed to both local and global equities.

The challenge of regaining previous highs remains, particularly in the context of US markets, where the iShares S&P 500 ETF continues to trade significantly lower than its highs. This decline highlights the ongoing volatility in global markets, despite occasional rallies in certain sectors like tech.

Sector Performance and the Broader Market

The broader market, including sectors like technology, healthcare, and consumer goods, has seen some positive movement in recent days. Tech stocks, in particular, have driven much of the gains, with companies like Microsoft and Meta standing out. However, despite these gains, the overall market remains somewhat below previous peaks. For those tracking local and international market performance through ETFs, the road to recovery still appears lengthy, with both Australian and US-focused funds needing a considerable uptick to return to prior levels.

Tech stocks continue to be a primary driver of the market's movement, offering both a stabilizing force and a potential point of growth amidst broader economic challenges. While recent positive days may suggest a return to form, the market as a whole still faces headwinds that could impede a full recovery to previous highs.