Stocks sold off Wednesday, weighed down by underwhelming reports from two mega-cap tech companies, leading to the S&P 500 and the NASDAQ Composite to post their worst session since 2022.
The Dow Jones Industrials withered 504.22 points, or 1.3%, to 39,853.87.
The much-broader index subtracted 128.61 points, or 2.3%, to 5,427.13.
The NASDAQ tumbled 654.94 points, or 3.6%, to 17,342.41
Shares of Google-parent company Alphabet fell 5% for their biggest one-day drop since Jan. 31 — when they dropped 7.5%. Although Alphabet reported a top- and bottom-line beat, YouTube advertising revenue came in below the consensus estimate. Meanwhile, Tesla shares declined 12.3% — their worst day since 2020 — on weaker-than-expected results and a 7% year-over-year drop in auto revenue.
Other major tech stocks fell in sympathy with Alphabet and Tesla. Nvidia fell 6.8% and Meta Platforms lost 5.6%, while Microsoft slid 3.6%.
Those reports mark investors’ first look at how mega-cap companies fared during the second quarter. Reports from these names are of special interest to Wall Street as this small cohort is responsible for the bulk of this year’s gains.
So far, though, the earnings season overall is off to a strong start. More than 25% of S&P 500 companies have reported their second-quarter earnings, with roughly 80% of them topping expectations.
Adding to investor concerns on Wednesday morning was weaker-than-expected U.S. manufacturing data. The U.S. PMI flash manufacturing output index fell to 49.5 in July, unexpectedly slipping into contraction territory as new orders, production and inventories declined.
Economists had forecasted a reading of 51.5, according to Dow Jones.
Prices for the 10-year Treasury fell back, raising yields to 4.28% from Tuesday’s 4.25%. Treasury prices and yields move in opposite directions.
Oil prices recovered 56 cents at $77.52 U.S. a barrel.
Gold prices scaled back $8.60 to $2,398.70
