Two of the most influential US tech companies both saw their shares plunge last night after unveiling third-quarter results.
Google's parent Alphabet revealed the first-ever decline in advertising revenues at its YouTube video-streaming service.
YouTube ad sales fell 1.9% to £6.2billion in the three months to September 30, compared to a year earlier, in the latest sign of a slowdown in the global economy.
Alphabet, which also owns Google, had been expected to report around £62billion in overall revenues for the period, or growth of around 12% - but instead sales were £60billion.
The Telegraph says profits of £12.15billion were also below what had been expected.
Shares fell more than 6% in after-hours trading after the results came out, wiping £6billion-plus off one of the world's biggest businesses.
Realigning resources
Sundar Pichai, Alphabet's chief executive, said: "Financial results for the third quarter reflect healthy fundamental growth in search and momentum in cloud, while affected by foreign exchange. We're working to realign resources to fuel our highest-growth priorities."
Alphabet's share price has fallen by nearly 30% since January, broadly tracking the wider technology markets, which have seen a steady sell-off during the year.
Meanwhile, Microsoft posted overall Q3 sales of £ 43.78billion - comfortably above market expectations.
However, the slowdown in its increasingly-important cloud computing division triggered a 6%-plus dip in the company's share price in after-hours trading.
Microsoft Azure, the cloud unit, grew by 35% year-on-year whereas analysts had expected to see growth of 40% as the business world continues its shift to cloud computing.
The company is also contending with the fallout of a global slowdown in PC sales, which are firmly linked to the company's Windows computer operating system.
Big drop in market value of Microsoft
Microsoft's market value is now down by nearly 30% from its £ 2.25trillion all-time high in November 2021.
The financial health of Alphabet and Microsoft is viewed as a bellwether for the broader US economy, which has seen increasing storm clouds gather during 2022 amid fears of recession fuelled in part by rising inflation, the strength of the dollar and slowing business spending.
FTSE 100
The UK's top share index, the FTSE 100, was down two points at 7,011 shortly after opening this morning, following yesterday's almost-static performance.
Brent crude futures were down 1.53% at $92.09 a barrel.
Companies reporting today
- Third-quarter results: Barclays, Meta, Standard Chartered, WPP
- Third-quarter trading statements: Heineken, Reckitt Benckiser