Nasdaq tumbles 3% in worst day of the year amid tech-earnings rout
A trader at the New York Stock Exchange puts his hand on his face in September 2008.
The technology sector led US stocks lower Wednesday, with the Nasdaq plunging 3% as it headed for its worst trading day of the year.
Investors fled the tech sector amid disappointing earnings on Tuesday, with Tesla missing estimates and Alphabet reporting that YouTube ad revenue fell short of expectations last quarter. Tesla shares were down more than 10% at 12:50 p.m. ET, trading at $220.85 while Alphabet shares fell 5% to $174.40.
“This is the fourth successive quarter of earnings misses, a first for Elon Musk’s visionary EV maker,” David Morrison, a senior market analyst at Trade Nation, said of Tesla in a note. “The question is how this will affect sentiment going forward? Will today’s sell-off prove to be an isolated, knee-jerk reaction which quickly dissipates? Or could it poison the well as the Q2 earnings season picks up?”
Investors are eyeing a slew of coming high-profile earnings, with Meta, Apple, and Amazon on deck to report their financials next week.
On the economic front, Thursday will see the reveal of second-quarter GDP figures, and the Federal Reserve’s favorite inflation measure will be published on Friday. The personal consumption expenditures index is expected to show inflation continued to cool last month, with prices rising by 2.5%. GDP, meanwhile, is expected to clock in at 2.1%, higher than the revised first quarter reading of 1.4%.
Here’s where US indexes stood shortly after midday on Wednesday:
- S&P 500: 5,456.69, down 1.78%
- Dow Jones Industrial Average: 40,015.58, down 0.85% (-342.51 points)
- Nasdaq composite: 17,469.09, down 2.95%
Here’s what else is going on today:
- There are four bullish signals pointing to more gains ahead for the stock market, BofA said.
- There’s a big rotation from cash to stocks — and it could help push the S&P 500 up 17% by the end of the year, according to UBS.
- The stock market is approaching 2 catalysts that could help spark the next leg of the bull run.
- The Fed is only going to cut rates once in 2024 as shelter inflation is too high and the job market remains too hot, according to Vanguard.
In commodities, bonds, and crypto:
- Oil futures were up. West Texas Intermediate crude oil rose 0.9% to $77.65 a barrel. Brent crude, the international benchmark, was up 0.7% to $81.57 a barrel.
- Gold inched higher 0.4% to $2,417 per ounce.
- The 10-year Treasury yield dropped two basis points to 4.218%.
- Bitcoin inched up to $66,723.
