The tech giant Alphabet fell on Wednesday as its cloud business failed to meet sales projections, which caused the Nasdaq and S&P 500 to decline. However, the Dow was boosted by rises in Microsoft and Boeing following their earnings releases.
Google parent Alphabet saw its cloud business expand at its slowest rate in at least 11 quarters, sending it plummeting 8.6% to a three-month low.
Conversely, Microsoft surged 3.8% to a three-month high, surpassing forecasts for first-quarter performance across all categories, including its cloud division.
According to David Morrison, senior market analyst at Trade Nation, “investors are worried that Alphabet is losing out to Microsoft and Amazon in a sector deemed to have enormous growth potential due to the future uptake of generative artificial intelligence.”
However, other mega-cap stocks were also negatively impacted by an increase in long-dated U.S. Treasury rates. Apple and Amazon.com dropped 1.2% and 3.2%, respectively, while Meta Platforms sank 3.0% as a result of a report that was released after the closing bell.
Consumer discretionary and real estate were among the biggest laggards, while eight of the eleven major S&P 500 sectors were trading down. Communications services had reached a low point that was almost one month away.
Boeing made 1.9% progress towards meeting its targets of producing $3 billion to $5 billion in free cash flow and exceeding third-quarter sales projections, despite lowering its outlook for 737 deliveries this year.
General Dynamics, a defence contractor, had a 3.5% increase in sales following its third-quarter report.
According to LSEG statistics released on Tuesday, 81% of the 118 S&P 500 firms that have reported thus far have exceeded analysts’ profit projections. On a yearly basis, quarterly profits are predicted to increase by 1.7%.
Meanwhile, as unrest flared up elsewhere in the area and a confrontation over badly needed aid loomed at the U.N. on Wednesday, Israel escalated its nighttime bombing of southern Gaza, where authorities stated that record numbers of Palestinians had been murdered again.
At 9:35 a.m. ET, the S&P 500 was down 26.72 points, or 0.63%, at 4,220.96, the Nasdaq Composite was down 162.46 points, or 1.24%, at 12,977.42, and the Dow Jones Industrial Average was up 85.11 points, or 0.26%, at 33,226.49.
The remainder of the week will be devoted to examining statistics on personal consumption spending, durable goods, and the third-quarter gross domestic product.
A media blackout was imposed on U.S. Federal Reserve officials before to their interest rate announcement on November 1.
Texas Instruments, among other stocks, fell 2.7% after the analogue chip manufacturer predicted lower-than-expected sales and earnings for the fourth quarter.
Following the real estate information provider’s revision to its annual revenue projection, CoStar Group saw a 6.1% decline.
MGM Resorts and Caesars Entertainment, two casino operators, saw their shares drop 2.2% and 3.4%, respectively, following the Detroit City Council’s adoption of a resolution endorsing striking employees.
On the NYSE and the Nasdaq, declining issues outnumbered advancing ones by a ratio of 2.99 to 1 and 2.41 to 1, respectively.
While the Nasdaq registered 144 new lows and 11 new highs, the S&P index recorded no new 52-week highs and 32 new lows.