On June 18, 2024, the stock market took a significant hit as disappointing reports from major tech companies dampened investor confidence. The Nasdaq Composite led the downturn, falling 2.9%, marking its worst day since December 2022. The S&P 500 declined by 1.7%, and the Dow Jones Industrial Average dropped 320 points, or 0.8%.
Alphabet, Google’s parent company, saw its shares fall by 5% despite beating top and bottom line expectations due to YouTube’s advertising revenue missing consensus estimates. Tesla’s shares plummeted 10% following weaker-than-expected results and a 7% year-over-year decline in auto revenue. Other tech giants followed suit, with Nvidia and Meta Platforms each losing 5% and 4% respectively, and Microsoft slipping 3%.
These earnings reports provided the first insights into how megacap tech companies performed during the second quarter. Wall Street closely watches these entities as they have driven most of this year’s gains. Strategist Ryan Grabinski from Strategas warned that earnings misses among these “magnificent seven” could trigger a market rotation, transitioning investor sentiment from ‘AI Enthusiasm’ to ‘AI Disappointment.’
While large-cap tech stocks struggled, the small-cap segment showed resilience. The Russell 2000 index surged 9% for the month. Conversely, the Dow was up 2%, the S&P 500 remained flat, and the Nasdaq dropped over 1%.
Despite the tech sector’s disappointing earnings, the broader earnings season had a strong start. According to FactSet, over 25% of S&P 500 companies reported second-quarter earnings, with approximately 80% surpassing expectations.
Adding to the market’s woes was weaker-than-expected U.S. manufacturing data. The U.S. PMI flash manufacturing output index fell to 49.5 in July, indicating contraction, as new orders, production, and inventories declined. Economists had predicted a reading of 51.5. Additionally, a report showed that new home sales for June were lower than anticipated, exacerbating investor concerns.
Original Story https://www.cnbc.com/2024/07/23/stock-market-today-live-updates.html
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