US stock market sees worst day since 2022 as Tesla and Alphabet disappoint
A street sign for Wall Street hangs in front of the New York Stock Exchange May 8, 2013 (Reuters Photo)
The U.S. stock market experienced its worst day since 2022 on Wednesday, largely due to disappointing financial results from major technology companies Tesla and Alphabet. This led to a significant sell-off, particularly impacting large tech stocks and raising concerns about the future of the recent rally driven by enthusiasm over artificial intelligence.
Major indices plunge
- S&P 500: Dropped 128.61 points (2.31%) to 5,427.13.
- Nasdaq Composite: Fell 654.94 points (3.64%) to 17,342.41, its largest single-day percentage drop since October 2022.
- Dow Jones Industrial Average: Declined by 504.22 points (1.25%) to 39,853.87, closing below 40,000 points for the first time in two weeks.
Key stocks hit hard
- Tesla: Shares plummeted 12.3%, marking the largest single-day decline since September 2020, following the company’s failure to meet profit estimates and a delay in the launch of its Robotaxi vehicle.
- Alphabet: Shares fell 5%, driven by high capital expenses for the year and a slowdown in advertising growth.
Broader market impact
Other major technology stocks also faced declines:
- Super Micro Computer Inc.: Down 9.15%
- Nvidia: Decreased by 6.8%
- Broadcom: Fell 7.6%
- Meta Platforms: Dropped 5.6%
- Microsoft Corp.: Slid 3.6%
- Apple: Dipped 2.9%
A Bloomberg index of the so-called Magnificent Seven technology stocks fell by 5.9%, marking the first time this index dropped below its average price for the past 50 days since May.
Expert insight
“Global cues have turned distinctly negative with a sharp 3.64% cut in Nasdaq, which is the worst cut in 2024. The tech stocks which have been driving the rally in the US are facing the brunt of selling due to worse-than-expected results and news,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Upcoming financial reports
- Microsoft Corp: To report financial results on July 30.
- Meta Platforms Inc., Apple Inc., and Amazon.com Inc.: Expected to report later in the week.
- Nvidia: Scheduled to report results on August 28, having benefited significantly from AI spending.
Market indicators and commodities
- VIX Volatility Index: Increased by 22.55% to 18.04.
- 10-Year US Treasury Yield: Rose by 1.14% to 4.286%.
- Dollar Index: Fell by 0.07% to 104.37, while the Euro declined by 0.1% against the dollar to 1.0840.
- Precious Metals: Gold dropped by 0.5% to $2,398 per ounce, and silver fell by 1.1% to $28.92 per ounce.
- Oil Prices: Brent crude at $81.48 per barrel, and West Texas Intermediate at $77.45 per barrel.
The sell-off marks the largest daily decline in the stock market since October 2022, signaling potential volatility ahead.
