Nasdaq 500 and S&P 500 experienced their biggest single-day percentage drops since 2022, after US technology stocks plunged due to disappointing earnings by Alphabet and Tesla.
The Nasdaq Composite dropped by 3.6% to a new low for the month, and the S&P500 fell by 2.3%. The so-called Magnificent 7, a grouping of high-performing US technology stocks, all fell on the same day, wiping out more value than any other session since Meta went public in May 2012.
Alphabet’s parent company, Google, dropped by 5% despite exceeding second-quarter earnings and sales forecasts. Investors focused on the large increase in capital expenditures, which increased by 91 percent to $12 billion. They also noted a slowdown of growth in the advertising sector.
Alphabet announced that Google generated $64.6 Billion in Ad Sales from April to Juni, an increase of 11.1% year-on-year. However, this is slower than the 13.0% growth reported during the previous quarter.
Tesla shares fell by 12 percent after the electric car maker missed second-quarter earnings estimates and reported its lowest profit margin for more than five years. After reporting lower sales, high costs from employee layoffs and heavy investments in artificial intelligence, the company was the S&P 500’s second-worst performer. The net income for the quarter fell by 45 percent to $1.47 Billion, which is below the analysts’ $1.9 Billion consensus estimate.
Elon Musk has used this announcement to push back the unveiling date of Tesla’s fleet self-driving cars from August to October. Musk claimed, however, that the project would increase the market value of the company by up to $5 trillion.
Musk prioritized the work on Tesla’s affordable electric vehicle over its long-awaited autonomous taxi service. Musk also increased Tesla’s focus on Optimus, a humanoid autonomous robot. He said that versions of Optimus were already being used in Tesla factories.
Nvidia dropped by 6.6% In the last two weeks, the chipmaker’s stock has dropped significantly amid reports that the United States is considering tighter restrictions on the export of advanced semiconductor technologies to China. Nvidia’s stock has more than doubled in the last year.
Apple’s stock price fell by 3%, Microsoft’s by 3.5% and Facebook’s Meta parent company was down by 5%.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.