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Major stocks fell dramatically Wednesday after several companies reported disappointing earnings, sparking a tech selloff and the biggest Wall Street bloodbath in nearly two years.
By market close, the Nasdaq had dropped a whopping 3.6 percent and the S&P 500 was down 2.31 percent – the worst single-day decline for either index since October and December 2022, respectively. The Nasdaq sat at 17342.41 at market close, while the S&P 500 sat at 5,427.13
Even the Dow Jones saw a 504.2-point drop – or more than 1 percent – to 39,853.87.
The decline can be attributed to disappointing second-quarter results from Tesla and Alphabet, the parent company of Google. Though neither report was disastrous, their subpar reports below analysts expectations may have worried investors.
Both companies are part of the “Magnificant Seven”, a group of mega-cap stocks considered to be the most influential on the market. Amazon, Apple, Meta, Microsoft and Nvidia are the other companies part of the elite group.
Any major disruptions in each company impact the market’s overall performance.
Tesla was one of the major stocks to weigh down the U.S. indexes after reporting a 45 percent drop in profit in Q2. Its stock performance on Wednesday reflected that drop with a 12.3 percent decline.
Alphabet, however, reported slightly better profits in Q2 but still their stock saw a 5 percent drop – possibly due to its shortcomings in YouTube ad sales.
Other tech companies like Meta and Microsoft saw a decline in shares. The parent company of Facebook and Instagram dropped 5.61 percent while Microsoft went down 3.59 percent.
Wednesday’s economic kerfuffle comes at the heels of the 2024 presidential election when economic concerns are expected to play a major role in voters’ decisions.
Approximately 64 percent of Americans believe the economy is on the wrong track, according to a Reuters and Ipsos poll. That number is consistent with other surveys from Gallup, Harvard polling, Pew Research Center and others which found the economy and inflation were top of mind for potential voters.
Despite the public’s concern, and Wednesday’s drop, the market remains at an all-time high.
