Market Update: US Stocks Slide on Weak Tech Sector Performance

On Wednesday, US stocks experienced a decline, primarily driven by a sell-off in the tech sector following disappointing financial results and earnings forecasts.

Tech Sector Leads the Decline

Major indexes started the day on a lower note, with the Nasdaq Composite witnessing a 0.6% slump.

Key Stock Movements

Uber shares tumbled approximately 5% after the rideshare giant reported a $654 million loss in the first quarter. Intel also faced a setback, dropping 2.5% after revising its guidance. Tesla shares saw a decline of 3.5% amidst reports of the Justice Department examining the accuracy of the company's autopilot technology claims.

Positive Earnings Amidst Concerns

Despite these developments, corporate earnings have been relatively strong. The S&P 500 is anticipated to show a minimum of 7% earnings growth for the first quarter, with 77% of reporting companies surpassing earnings expectations, as per FactSet.

Concerns Over Recession and Rate Cuts

Investors, however, are apprehensive about a potential recession and anticipated rate reductions later this year. David Bahnsen, the chief investment officer at The Bahnsen Group, expressed concerns about the impact of elevated rates on corporate and real estate debt.

Market Expectations and Indicators

Market projections hint at 1-2 rate cuts by year-end, with expectations that the Fed funds rate will remain around 5%. The New York Fed estimates a 58% chance of a recession in the US by March next year.

Current Index Figures

At the opening bell on Wednesday:

• S&P 500: 5,167.00, down 0.4%
• Dow Jones Industrial Average: 38,846.94, -0.1% (-37.32 points)
• Nasdaq Composite: 16,233.30, down 0.58%

Other Market Highlights

Notable events from the day included Warren Buffett's caution regarding AI scams and financial risks, along with Disney's stock decline due to revenue and streaming performance.

Commodities and Crypto Update

In the commodities and crypto market:

• West Texas Intermediate crude oil dropped 0.73% to $77.81 per barrel. Brent crude also fell by 0.73% to $82.55 per barrel.
• Gold slipped 0.21% to $2,309.40 per ounce.
• The 10-year Treasury yield saw a two basis point increase, reaching 4.49%.
• Bitcoin experienced a 2.5% decline, settling at $62,088.

Original source: Business Insider

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By: jsor@businessinsider.com (Jennifer Sor)
Title: Market Update: US Stocks Slide on Weak Tech Sector Performance
Sourced From: markets.businessinsider.com/news/stocks/stock-market-today-selloff-tech-earnings-sp500-interest-rates-recession-2024-5
Published Date: Wed, 08 May 2024 13:48:03 +0000