Stock market news today: Nasdaq futures lead losses as first Big Tech earnings fail to deliver
07/24/2024 17:39
Disappointing Alphabet and Tesla earnings have stirred up worries that Big Tech's power to fuel stock market gains is fading.
The Nasdaq led US stocks lower before the bell Wednesday, after disappointing Alphabet and Tesla earnings stirred up worries that Big Tech's power to fuel gains is fading.
Futures on the tech-heavy Nasdaq 100 (NQ=F) sank almost 1%, while S&P 500 futures (ES=F) fell roughly 0.7%. Dow Jones Industrial Average futures (YM=F) retreated 0.4%, after a losing Tuesday for all three gauges.
Stocks are sinking as investors digest mixed quarterly earnings from Google parent Alphabet (GOOGL, GOOG) and Tesla (TSLA), the first of the "Magnificent 7" megacaps to report. Those results have set Wall Street wondering whether the dominant tech stocks behind this year's rally now face sell-offs, amid questions about AI's potential boost to their growth.
EV maker Tesla's stock price slid almost 8% in pre-market trading, while Alphabet shares dropped over 3%.
At the same time, the ongoing rotation out of tech stocks into small caps could alleviate headwinds for gains. The Russell 2000 (^RUT) has outperformed the major indexes in the past two days.
Read more: 32 charts that tell the story of markets and the economy right now
Investors are bracing for the next wave of earnings to flood in, with AT&T (T), Chipotle (CMG), Ford (F), IBM (IBM), and General Dynamics (GD) due to post results on Wednesday.
Also ahead are readings on US manufacturing and services activity in July, ahead of Thursday's second-quarter GDP print and Friday's key report on June PCE inflation, the report favored by the Federal Reserve.
Live2 updates
Off the phone with: AT&T CFO
Not exactly a blowout quarter from AT&T (T) just crossing the wires – in line earnings and a reiteration of guidance (which the Street may see as a letdown).
I caught up with AT&T CFO Pascal Desroches and asked him about the consumer weakness we are starting to hear being called out on earnings calls:
“We are probably a bit of a lagging indicator. We're not going to be the ones to first see weakness. When you look at the criticality of phone service, this is probably one of the last things a consumer is going to cut out,” Desroches told me.
He added that it looks like “consumers are hanging in there.”
Musk on Nvidia
And it's time to start guessing how huge Nvidia's (NVDA) quarter will be when it reports in a few weeks.
What Tesla (TSLA) CEO Elon Musk said about the chip-maker on his earnings call last night:
"I'm incredibly impressed by Nvidia's execution and the capability of their hardware. And what we are seeing is that the demand for Nvidia hardware is so high that it's often difficult to get the GPUs. And there just seems this, I guess I'm quite concerned about actually being able to get state-of-the-art Nvidia GPUs when we want them."
