A strategist said that the move was subsequently driven by poorer than expected earnings from tech bellwethers Amazon and the Google parent company Alphabet. Their shares fell 9.2 percent and 5.9 percent respectively in the premarket market.
There were "high expectations" for this earnings period, King Lip said, chief strategy at Baker Avenue Asset Management, CNBC. "The income does not come as high as people suspected," said Lip, adding that "for Amazon, forward-looking guidance was surprisingly easy."
Amazon said Thursday that revenues would amount to $ 66.5 billion and $ 72.5 billion in the fourth quarter, well below the 73.79 billion dollar budget. The alphabet's results were also disappointing, with the internet reporting of $ 33.7 billion in the third quarter, against an expected $ 34.04 billion.
Vasu Menon from Singapore-based OCBC Bank says earnings have been strong so far, but he added a note of caution. Vice President of OCBC Group Wealth Management said investors already expected strong earnings, and are now fearing the effect of the US-China trade war, especially next year.