European stock markets tumbled into the red on Friday after Amazon (AMZN) shares slumped as much as 18% in after-hours trading on disappointing results.
In London, the FTSE 100 (^FTSE) fell sharply at the open, down 1.1%, as worries over widening COVID restrictions in China dragged commodity stocks.
Traders were also spooked amid reports of an expansion of the windfall tax on energy firms.
In Paris, the CAC (^FCHI) tumbled 0.8% and the DAX (^GDAXI) was 1% lower in Germany.
On Thursday night, Amazon warned of weaker consumer spending in the run up to Christmas after its tech peers also posted weak trading updates.
The online retailer missed Wall Street expectations as it revealed revenues of $127.1bn (£110.29bn) for the three months to September. It said it expected earnings over the three months around the festive season to be between $140bn and $148bn, coming in below analyst estimates of $155.5bn.
The miss was partly blamed on currency effects, thanks to a strong US dollar.
Costs have also risen sharply over the last nine months, jumping to $355.27bn from $311bn a year ago, an increase of 14% year on year as inflation and rising interest rates have taken their toll.
Read more: Amazon stock tanks 20% after revenue and guidance miss expectations
Andy Jassy, Amazon’s chief executive, said: “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”
Ipek Ozkardeskaya, senior analyst at Swissquote, said: “An ugly week of Big Tech earnings is…coming to an end, having wiped out hopes of seeing earnings boost gains across the stock markets.”
Across the pond, S&P 500 futures (ES=F) were down 1%, Dow futures (YM=F) shed 0.6%, and Nasdaq futures (NQ=F) were 1.5% lower as trade began in Europe.
It came as Elon Musk became the new owner of Twitter (TWTR) and fired top executives he had accused of misleading him.
He sacked chief executive Parag Agrawal, chief financial officer Ned Segal and legal affairs and policy chief Vijaya Gadde, according to reports.
Meanwhile, stocks in Asia tumbled after the falls in US tech shares. In Tokyo, the Nikkei (^N225) closed 0.9% lower, while the Hang Seng (^HSI) slumped 4% on the day to their lowest levels since 2009. The Shanghai Composite (000001.SS) dipped 2.3%.
The Japanese yen fell overnight after the Bank of Japan stuck to ultra-low interest rates and maintained its dovish stance, bucking the tightening trend among central banks around the world.
However, it did revise its price forecasts higher through 2024, and warned that inflationary pressures were broadening.
“The labour market will continue to tighten and gradually strengthen wage pressure,” it said.
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