US stocks took a hit on Wednesday as investors processed disappointing tech earnings. Tesla fell short on earnings in the last quarter, while Alphabet reported a shortfall in YouTube ad revenue. The market is bracing for more tech giants to announce their results in the coming week.
Tech Stocks Lead Market Decline
The US stock market saw a continued decline on Wednesday, primarily driven by a drop in tech stocks following lackluster earnings reports from Alphabet and Tesla. Major indexes experienced a downward trend, with the Nasdaq 100 declining by over 1%.
Disappointing Earnings Reports
Investors reflected on a round of disappointing earnings reports from Tuesday, where Tesla failed to meet earnings expectations and Alphabet disclosed underperformance in YouTube ad revenue for the previous quarter. This led to an 8% drop in Tesla shares and a 4% decrease in Alphabet shares during early Wednesday trading.
Market Analyst's Perspective
David Morrison, a senior market analyst at Trade Nation, noted that Tesla has now experienced four consecutive quarters of earnings misses, a first for Elon Musk's electric vehicle company. He raised concerns about the impact on market sentiment moving forward and questioned whether the sell-off on Wednesday was a temporary reaction or could have longer-term implications for the Q2 earnings season.
Upcoming High-Profile Earnings
Investors are closely watching for upcoming earnings announcements from Meta, Apple, and Amazon scheduled for the following week, anticipating further market reactions based on these reports.
Economic Indicators to Watch
On the economic front, Thursday will bring the release of second-quarter GDP figures, while the Federal Reserve's preferred inflation measure is set to be published on Friday. Expectations suggest a modest inflation rate of 2.5% and a GDP growth of 2.1% for the quarter, surpassing the revised reading from the previous quarter.
Current Market Status
As of the 9:30 a.m. opening bell on Wednesday, US indexes showed the following standings:
- S&P 500: 5,504.95, down 0.91%
- Dow Jones Industrial Average: 40,214.81, down 0.36% (-157.02 points)
- Nasdaq composite: 17,729.77, down 1.49%
Other Market Developments
Additional market insights include a shift from cash to stocks, potentially boosting the S&P 500 by 17% by year-end according to UBS. The market is also anticipating catalysts that could drive the next phase of the bull run. Vanguard projects a single rate cut by the Fed in 2024 due to persistent high inflation in shelter costs and a strong labor market.
Commodities and Crypto Update
In the commodities and crypto space:
- Oil futures saw an increase, with West Texas Intermediate crude oil climbing 0.9% to $77.65 a barrel and Brent crude rising by 0.7% to $81.57 a barrel.
- Gold prices edged up by 0.4% to reach $2,417 per ounce.
- The 10-year Treasury yield decreased by two basis points to 4.218%.
- Bitcoin experienced a slight uptick, reaching $66,723.
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By: jsor@businessinsider.com (Jennifer Sor)
Title: US Stock Market Update: Tech Earnings Disappoint, Market Reacts
Sourced From: markets.businessinsider.com/news/stocks/stock-market-today-tesla-alphabet-q2-earnings-miss-tech-selloff-2024-7
Published Date: Wed, 24 Jul 2024 13:34:03 +0000
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