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U.S. stocks fell on Wednesday after a disappointing batch of earnings from big tech companies dampened broader market sentiment and investors continued to reduce risk exposure amid a rapidly changing domestic political landscape.
U.S. stocks ended modestly lower on Tuesday, helped by a broader decline in the S&P 500 and a reversal of the so-called “Trump trade” that favored domestically focused stocks over those with major links to foreign markets.
However, last night’s Magnificent 7 tech earnings look set to accelerate a sell-off in mega-cap tech stocks after a big miss from Tesla (Tesla) A mixed bag of second-quarter numbers from Alphabet, Google’s parent company. (Google) .
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Tesla Inc., which saw its profits nearly halve from a year ago thanks to the ongoing electric vehicle price war, posted its weakest profit margins in five years, sending its shares down 7.7% in premarket trading.
Meanwhile, Google beat Street earnings expectations but indicated that capital spending levels will remain high through the end of the year while global ad sales look set to decline in the coming months.
The group’s shares fell 3.4% in pre-market trading to an opening price of $177.39 per share.
Global Business Machines (IBM) and AT&T (T) Wall Street will continue its busy earnings week this morning, with second-quarter updates before the opening bell, as Ford Motor Co. reports its quarterly results. (F) Report after close of trading.
Investors will also be looking ahead to June new home sales data and the closely watched S&P Global Economic Activity Survey for July right after the start of trading.
Donald Trump, who had a big lead in the polls in last November’s election, is scheduled to travel to Charlotte, North Carolina, today for what is expected to be the first of his many attacks on Vice President Kamala Harris, who has outpaced the former president in some exit polls and set a new single-day fundraising record of $81 million earlier this week.
As the trading day begins on Wall Street, futures linked to the S&P 500 index are pointing to a 38-point drop at the open, while futures linked to the Dow Jones Industrial Average are priced in for a 185-point drop.
Meanwhile, the tech-focused Nasdaq is expected to fall about 200 points further, thanks in part to the post-earnings reaction from Google and Tesla, as well as a pre-market decline in Nvidia shares. (NVDA program) .
More from Wall Street Analysts:
- Analyst Revisits Nvidia Stock Price Target After Blackwell Scrutiny
- Analysts Set New Walgreens Stock Price Targets After Earnings
- Analyst Reviews Facebook Parent Company’s AI Stock Price Target
In overseas markets, the pan-European STOXX 600 index fell 0.58% in Frankfurt, with Britain’s FTSE 100 index down 0.14% in London.
Japan’s Nikkei 225 index in Asia fell 1.11% overnight in a continuation of Wall Street’s slide, led by declines in the technology sector, while the MSCI regional index excluding Japan was down 0.35% at the close of trading.
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