Investing.com – The S&P 500 ended sharply lower on Wednesday, suffering its biggest one-day drop since 2022, as heavyweights Alphabet and Tesla posted dismal second-quarter earnings and technology stocks tumbled.
As of 16:00 ET (20:00 GMT), the Dow Jones Industrial Average was down 2.2%, its worst day since December 15, 2022. 1.3%.
Tesla shares plummet as earnings disappoint, outlook dims
Tesla’s second-quarter profit fell short of expectations due to falling car sales, and its stock price fell 12%.
Tesla’s profit margins fell to their lowest in five years as electric car makers slashed prices to combat growing competition in major markets such as China.
Some on Wall Street remain optimistic about the stock, despite pressure on margins due to optimism about future growth opportunities such as robotaxis.
Wedbush said: “While weak margins are weighing on the stock… we believe the next phase of Tesla’s growth story is around autonomous driving, robotaxis and artificial intelligence for Musk’s company, and this vision is about to arrival.
Alphabet falls despite earnings beat; Seagate jumps
Google parent Alphabet (NASDAQ: ) fell nearly 5% even as its second-quarter earnings beat expectations for ad sales growth and strong demand for its cloud services.
Deutsche Bank said in a note that strong performance in Alphabet’s search and cloud businesses was offset by “underperformance on YouTube, primarily due to comparison difficulties and continued weakness in Google Networks.”
Seagate Technology PLC (NASDAQ: Seagate Technology PLC) rose 4% after its fourth-quarter earnings beat Wall Street expectations amid growing demand for data storage led by artificial intelligence. Escape from the tech-stock slump.
Fed Dudley changes view, calls for rate cut next week
Former new Fed Chairman Bill Dudley on Wednesday called on the central bank to cut interest rates as soon as possible amid recession concerns, reversing his long-held view that the central bank should stick to a long-term regime of higher interest rates.
“The facts have changed, so I’ve changed my mind. The Fed should cut interest rates, preferably at its policy setting meeting next week,” Dudley said ahead of the Fed’s July 30-31 policy meeting.
Visa revenue falls short of expectations, AT&T surprises during earnings period
Beyond technology, Visa (NYSE: ) reported third-quarter results that beat Wall Street expectations, but growth in payment volumes pointed to consumer weakness, weighing on sentiment and sending the stock down about 4%.
“Marginal consumer sentiment is felt to be weakening as U.S. trends as of July 21 slowed slightly, with PV growth at 4% and 5%,” RBC said in a report on Wednesday.
Chipmaker Texas Instruments (Nasdaq: ) posted strong second-quarter earnings, with adjusted earnings per share beating expectations and shares of the company flat.
AT&T (NYSE: AT&T) shares rose 5% after the telecom giant beat market expectations for wireless subscriber growth in the second quarter as its higher-tier unlimited plans attracted customers.
(Peter Nurse and Ambar Warrick contributed to this article.)
