Market sentiment was cautious on Wednesday as investors digested the possibility of a Google breakup and awaited further guidance from the Federal Reserve on the likelihood of a “soft landing” for the economy. The tech-heavy Nasdaq Composite and S&P 500 indices hovered just below the flat line, while the Dow Jones Industrial Average edged up 0.3% in early trading.
The US Justice Department’s consideration of a breakup of Google’s key businesses sent ripples through the tech sector, with shares of Alphabet, Google’s parent company, slipping in early trading. The DOJ’s proposal outlines a framework for remedies to address anticompetitive practices in the search engine market, including the potential separation of Google’s Chrome, Play, and Android products from its search business.
Meanwhile, Taiwan Semiconductor Manufacturing Co. (TSM) reported quarterly revenues of NT$759.7 billion ($23.6 billion), exceeding expectations and sending its US-listed stock up 0.7% in premarket trading. The strong results countered concerns about a slowdown in AI spending, as companies continue to invest in hardware to power generative artificial intelligence tools.
In other news, Boeing (BA) shares were set to open lower after negotiations with its machinist union broke down, leading the aircraft maker to withdraw its contract proposal. The labor talks impasse increases the likelihood of a credit downgrade, according to rating agency S&P.
Investors are eagerly awaiting the release of minutes from the Fed’s September meeting, which may provide insight into the central bank’s decision to cut interest rates by 50 basis points and its views on the economy’s growth prospects. The debate over the state of the economy continues, with some experts warning of a “no landing” scenario, where the economy keeps growing and inflation risks re-emerge.
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