Tech Stocks Lead Broad Market Decline, Nasdaq Slides 1.2%
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- US stocks end five straight days of gains, Nasdaq drops 1.2% with tech weighing on the mood
- Apple, Alphabet, and Microsoft deliver strong quarterly figures, shares post mixed results
Equities slipped from record highs on Tuesday and ended a five-session winning streak. All three major US indexes ended the day in the red, prompted by fears that the meltdown in China could sweep into stocks on Wall Street. Concerns about China’s regulatory crackdown on the country’s largest companies have been causing jitters for the last several days across the global markets.
The S&P500 dropped 20.84 points, or 0.47%, to finish Tuesday action at 4,401.46. The 30-stock Dow Jones Industrial Average slipped 85.79 points, or 0.24%, to 35,058.52. The Nasdaq Composite declined 180.14 points, or 1.21%, to 14,660.58. The tech-centered index suffered its worst single-session performance since May.
Losses in big tech companies like Tesla, Amazon, and Apple amounting to 1.5% or more for each dragged the market lower. Economically sensitive stocks had a rather muted reaction but also dropped on the day.
US investors were largely selling the major tech firms that were slated to report right after the bell. Apple, Microsoft, and Google-parent Alphabet delivered record-breaking corporate results for the quarter ended June.
Despite blowout earnings reports, Apple shares and Microsoft shares failed to reflect the soaring performance of their businesses as there wasn’t a strong earnings-fueled rally for the Big Tech group of three. Alphabet was the only stock that performed well in after-hours trading as it pushed higher by more than 3%.
Apple’s latest earnings figures showed the company made a profit of $21.7bn, beating estimates of $16.62bn. Apple CFO Luca Maestri praised the results saying the company continues to “make significant investments across our business to support our long-term growth plans.”
“Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices,” Mr. Maestri also added.
Microsoft surpassed expectations on earnings as revenue rose 21% year-on-year to $46.15bn. Net income increased by 47% to $16.5bn. Alphabet’s sales from advertising bolstered the company’s revenue by 62% from a year ago to $61.88bn. Profit more than doubled to $18.53bn as per-share earnings exceeded analyst estimates.
Crypto and Europe News Shake the Market
Meanwhile, traders and investors around the world have set their gaze upon today’s conclusion of the Federal Reserve’s monetary policy meeting. Market participants expect to hear the latest updates by Fed Chair Jay Powell who will appear for a press conference today. Key topics of discussion are expected to include surging inflation, easing of the monetary stimulus, and the timing of raising the interest rates.
In Europe, markets on Wednesday are trading moderately higher after yesterday’s session brought losses across major European bourses. The Stoxx Europe 600 lost 2.49 points, or 0.54%, to slide below the 460-mark and close at 458.65. The region-wide stock index logged its second straight day in negative territory.
Meanwhile, Bitcoin is pushing higher today as the upbeat market mood continues to lift all major tokens. Since early morning, the leading cryptocurrency has been trading to the upside to a session high of $40,300, a gain of 6.1% on the day. Ether’s reaction is more subdued as the coin is trading higher by roughly 2% on the day.
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