Major U.S. indexes are on pace to open sharply lower Wednesday, as mega-cap tech stocks tumble after disappointing earnings reports.
Futures tied to the Nasdaq 100 were down 1.4%, while those linked to the S&P 500 and Dow Jones Industrial Average were off 0.9% and 0.4%, respectively. The major indexes finished slightly lower on Tuesday as investors digested a slew of earnings reports and awaited quarterly results from Tesla (TSLA) and Alphabet (GOOG).
Shares in the two tech giants, which reported earnings after the closing bell yesterday, were down sharply in premarket trading Wednesday. Tesla shares were down about 8%, while Alphabet slid 4%. Shares of other Magnificent 7 companies, including AI investor favourite Nvidia (NVDA), Microsoft (MSFT) and Amazon (AMZN) were also moving lower.
Large-cap tech stocks, which have powered the market most of the year, have encountered significant volatility in recent weeks as investors shift money into small-cap stocks amid expectations that smaller companies stand to benefit most from widely anticipated rate cuts by the Federal Reserve.
The earnings calendar was busy again on Wednesday morning. Among companies reporting results, AT&T (T) shares were up, Thermo Fisher Scientific (TMO) fell and GE Vernova (GEV) was little changed. Noteworthy earnings reports scheduled for after the closing bell include International Business Machines (IBM) and Chipotle (CMG).
In other markets, gold prices were up slightly to around $2,420 an ounce and crude oil was up about 1.2% after falling the previous session. Bitcoin was up slightly to around $66,500.
The yield on 10-year Treasurys was holding steady at around 4.24%, as investors await economic growth and inflation data that will be released in the coming days. Market participants are hoping that data will give the Fed confidence to start cutting its benchmark interest rate soon.
Source: https://www.investopedia.com/dow-jones-today-07242024-8682694
