Successful in large liquidations Wall Street in the current session, under the weight of the quarterly results of two leading technology companies, leading him S&P 500 worst daily performance since December 2022.
The index lost 2.31% of its value, closing at 5,427.13 points. THE Nasdaq fell 3.64% in the worst session of 2024, ending at 17,342.41. The Nasdaq 100 fell 4%. THE Dow Jones fell 504.22 points or 1.25% to 39,853.87 points.
Shares of Google parent Alphabet fell 5%, their biggest one-day decline since Jan. 31, when they fell 7.5%. Although Alphabet reported better-than-expected results, YouTube’s ad revenue fell short of expectations. At the same time, Tesla stock fell 12.3% in its worst session of 2024 after worse-than-expected results.
The pace of Alphabet and Tesla is followed by other big technology companies. Nvidia and Meta Platforms lost 6.8% and 5.6% of their value at the same time, while Microsoft fell by 3.6%.
Today’s selloff is due to the “perfect storm” of an overbought market, overly high earnings expectations and seasonally weak weather for stocks. So this pullback didn’t surprise investors too much, according to Baird strategist Ross Mayfield.
“The problem in Tech is not that the income is not perfect, but that the sector has been hit by a sharp transfer of investors to other sectors that have been delayed until now, and this happened after the consumer price data,” explained of a Vital Knowledge analyst.
The Russell 2000 small-cap index fell 2.1%. For the month, it rose 7.2% as investors moved from big tech names to smaller stocks. The Dow is up 1.9% so far in July, while the S&P 500 is down 0.6% and the Nasdaq is down 2.2%.
Despite the fact that the big names in technology did not meet the expectations of analysts, in general the period of announcements of the second quarter corporate results got off to a strong start. More than 25 percent of S&P 500 companies reported second-quarter results, with 80 percent beating analysts’ estimates, according to FactSet data.
Worse-than-expected US manufacturing data also added to investor concerns. The manufacturing PMI fell to 49.5 in July, showing an unexpected decline as new orders fell.