Investing.com-- U.S. stocks fell Wednesday, with technology stocks seeing renewed weakness after underwhelming second-quarter earnings from heavyweights Alphabet and Tesla.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average fell 145 points, or 0.4%, the S&P 500 dropped 60 points, or 1.1%, and NASDAQ Composite slipped 335 points, or 1.9%.
The disappointing earnings could set a dour tone for more quarterly prints due in the coming days, and also point to a renewed rout in the sector, which has been battered by profit-taking and a rotation into more economically sensitive sectors over the past week.
Tesla tumbles as profit disappoints, outlook sours
Tesla (NASDAQ:TSLA) stock tumbled almost 10% after its second-quarter earnings missed estimates amid falling vehicle sales.
Tesla’s profit margins fell to a five-year low as the electric vehicle maker aggressively cut prices to grapple with increased competition in key markets such as China.
Costs during the quarter rose sharply on increased expenditure on artificial intelligence and robotaxis, although the latter’s reveal was delayed to October from August.
Alphabet falls despite earnings beat
Google-parent Alphabet (NASDAQ:GOOGL) fell 5%, even as its second-quarter earnings beat expectations on increased advertising sales and strong demand for its cloud services.
But advertising sales- which are the company’s top revenue source- grew at a slower pace in the quarter, while revenue from YouTube missed some market expectations.
Alphabet’s expenses also rose substantially year-on-year amid continued expenditure on AI development- a trend that is expected to eat into profit margins in the coming quarters.
Losses in Alphabet and Tesla spooked the broader tech sector, which was already nursing steep losses over the past week.
More quarterly earnings land
There are more earnings to digest Wednesday, with Visa (NYSE:V) stock down 4% after the credit card giant’s third-quarter revenue growth fell short of expectations as steep borrowing costs limited consumer spending.
Texas Instruments (NASDAQ:TXN) stock rose 0.5% after the chipmaker reported a solid earnings beat for the second quarter, with adjusted earnings per share surpassing the estimates.
AT&T (NYSE:T) stock rose 4% after the telecoms giant exceeded market expectations for wireless subscriber additions in the second quarter, as its higher-tier unlimited plans attracted customers.
Markets were also looking at any new developments in the presidential race, after President Joe Biden dropped out over the weekend and endorsed Vice President Kamala Harris as the Democratic frontrunner.
Harris was seen taking a slight lead over Republican nominee Donald Trump, according to a Reuters/Ipsos poll.
Crude boosted by US inventories
Crude prices rose Wednesday, snapping three straight sessions of decline, as falling U.S. crude inventories boosted demand hopes from the world’s largest consumer.
By 09:35 ET, the U.S. crude futures (WTI) climbed 0.8% to $77.56 a barrel, while the Brent contract rose 0.7% to $81.57 a barrel.
Data from the American Petroleum Institute showed U.S. oil inventories shrank by 3.9 million barrels last week, compared with expectations for a build of 0.7 million barrels.
The API data, if confirmed by official inventory data due later in the session, showed inventories shrinking for a fourth consecutive week, as oil demand likely picked up with the travel-heavy summer season.
Both contracts had lost between 5% and 7% over the previous three sessions, tumbling to their weakest levels since early-June.
(Ambar Warrick contributed to this article.)