Nasdaq tracks for worst day since 2022 after Alphabet and Tesla fail to impress Wall Street
Tech company shares declined on July 24
New York (CNN) — Tech shares led a selloff Wednesday after lackluster earnings reports from two of the market’s most prominent heavyweights.
The Nasdaq Composite declined 3%, on pace for its worst daily percentage decline since December 2022. The S&P 500 fell 1.8% and the Dow lost 0.9%.
Big Tech’s decline comes after Tesla’s second-quarter results released Tuesday evening showed a second-straight decline in quarterly profit and that its profits plunged more than 40% from a year ago. The electric vehicle maker faces growing competition from established automakers domestically and internationally and a slowdown in EV sales growth.
Tesla shares fell 10.6% on Wednesday. The EV-maker didn’t give a new sales forecast for the year but warned that its vehicle volume growth rate this year could be substantially lower than that of 2023.
Elsewhere, Alphabet shares slid 5.1% after reporting a miss on expectations for YouTube advertising revenue.
Thursday’s tumble extends the decline in tech stocks seen during the past week after a cool inflation report and resilient economic data led investors to bet that the Federal Reserve will cut interest rates in September.
Wall Street has rotated out of the tech bigwigs that led stocks higher over the past year in favor of smaller stocks that have been beaten down by sky-high rates. The Russell 2000, which tracks the performance of US small-cap stocks, is up 9.3% for the month, outperforming the S&P 500’s 0.1% loss.
A confluence of other factors has also battered the tech sector recently. Investors have contended with an ongoing global tech outage that has left travelers stranded at airports, consumers at risk of getting duped by cybercriminals and brought computer systems across health care and government sectors to a halt.
The Nasdaq last week had its worst day since 2022, after the selloff in tech was worsened by a report from Bloomberg that the Biden administration is mulling plans to impose more sanctions on Chinese tech firms and to heighten semiconductor trade restrictions between the US and China.
This is a developing story and will be updated.
The-CNN-Wire
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