A string of quarterly reports from technology companies this week has given US stock indexes momentum to move downwards, as noted by the Financial Times. On average, they showed the worst intraday dynamics over the previous one and a half or even two years.
Image Source: Tesla
The S&P 500 index, which unites many of the “blue chips” of the American stock market, fell by 2.3%, demonstrating the worst dynamics of the trading session since December 2022, the Nasdaq Composite index sank by 3.6%, which was the strongest decline since October 2022. The anti-leaders in terms of price decline were shares of Nvidia, Microsoft, Apple and Tesla. The latter lost 12.3% of its capitalization during the day, which was the worst daily dynamics since 2020. Investors were upset by the downward trend in the automaker’s profits.
Alphabet shares lost 5%, their biggest daily decline since January. The company was not even helped by the fact that actual quarterly statistics exceeded existing forecasts. YouTube video hosting advertising revenue did not meet analysts’ expectations. According to experts, this correction in the stock market confirmed the desire of many investors to move away from shares of companies that are in one way or another related to the topic of artificial intelligence. In this sense, the riskiest securities are Alphabet and Tesla shares, according to some investors. UBS analysts recommended selling Tesla shares, as the timing of the company’s so-called “robotaxis” entering the market and achieving profitability is still vague. In this sense, investors’ fears are not even compensated by the statements of Elon Musk, who expects that if successful, this line of business will raise Tesla’s capitalization to $5 trillion.
Nvidia shares fell 6.8%, the worst performers on the S&P 500, while Super Micro Computer and ASML Holdings were the worst performers on the Nasdaq. As a result, the Nasdaq index fell by 7% from the maximum reached on July 10 of this year. Meta✴ Platforms fell 5.6%, Microsoft fell 3.6% and Apple saw its share price fall 2.9%. Representatives of Charles Schwab explained that large companies in the technology sector are increasing spending on artificial intelligence, and for investors to remain interested in their shares, financial results must exceed market expectations by a large margin. JPMorgan experts note that the sale of shares on the stock market was accompanied this week by a deterioration in the macroeconomic situation. Meta✴, Amazon and Apple will publish their reports only next week, and they can also act as a trigger for a decline in stock market quotes.