US stock markets lost ground on Wednesday, with technology stocks registering further weakness in the wake of disappointing second-quarter results from major companies such as Alphabet and Tesla.
The poor results could create a dark cloud for upcoming quarterly releases and point to a fall in the sector, which has been weighed down by profit-taking and rotation into more economically vulnerable sectors over the past week. This and much more is shaking the stocks markets today.
Tesla Plunges on Missing Earnings Estimates and Worsening Forecasts
Tesla (TSLA) shares plunged nearly 8% ahead of the market open after second-quarter earnings missed estimates amid falling vehicle sales.
Tesla's profit margins fell to their lowest level in five years as the electric car maker cut prices sharply to cope with increased competition in key markets such as China.
Costs during the quarter rose sharply due to increased spending on artificial intelligence and robotaxis, although the latter's introduction was delayed from August to October.
Although Alphabet Improves Profits, Its Price Falls
Alphabet (GOOGL), Google's parent company, lost more than 3%, even though its second-quarter profit beat estimates on higher advertising sales and strong demand for its cloud services.
While advertising sales, which are the company's main source of revenue, grew at a slower pace in the quarter, revenue from YouTube did not meet some market estimates.
Alphabet's expenses also increased sharply year-over-year due to continued spending on artificial intelligence development, a trend that is expected to affect profit margins in subsequent quarters.
Alphabet's and Tesla's losses spooked the broader technology sector, which was already weighed down by heavy losses the previous week.
More Quarterly Results
Attention remains focused on a number of upcoming earnings releases, with more results due in today's trading session from companies such as International Business Machines (IBM), Qualcomm Incorporated (QCOM), ServiceNow (NOW), AT&T (T), Ford (F) and General Dynamics Corporation (GD).
Markets were also watching for any developments in the US presidential race, after President Joe Biden decided over the weekend to drop out of the race and endorse Vice President Kamala Harris as the Democratic Party's front-runner.
According to a Reuters poll, Harris appeared to take a small lead over Republican Party candidate Donald Trump.
US Inventories Boost Crude Oil Prices
Crude oil prices rose on Wednesday, overcoming three straight sessions of declines, as falling US crude inventories boosted demand expectations in the world's biggest consumer.
Data from the American Petroleum Institute showed US crude inventories fell by 3.9 million barrels the previous week, compared with forecasts for an increase of 0.7 million barrels.
The API data, if ratified by official inventory data to be released later in the session, would mark the fourth consecutive week of inventory drawdowns, as demand for oil is expected to increase with the travel-filled summer season.
The poor results could create a dark cloud for upcoming quarterly releases and point to a fall in the sector, which has been weighed down by profit-taking and rotation into more economically vulnerable sectors over the past week. This and much more is shaking the stocks markets today.
Tesla Plunges on Missing Earnings Estimates and Worsening Forecasts
Tesla (TSLA) shares plunged nearly 8% ahead of the market open after second-quarter earnings missed estimates amid falling vehicle sales.
Tesla's profit margins fell to their lowest level in five years as the electric car maker cut prices sharply to cope with increased competition in key markets such as China.
Costs during the quarter rose sharply due to increased spending on artificial intelligence and robotaxis, although the latter's introduction was delayed from August to October.
Although Alphabet Improves Profits, Its Price Falls
Alphabet (GOOGL), Google's parent company, lost more than 3%, even though its second-quarter profit beat estimates on higher advertising sales and strong demand for its cloud services.
While advertising sales, which are the company's main source of revenue, grew at a slower pace in the quarter, revenue from YouTube did not meet some market estimates.
Alphabet's expenses also increased sharply year-over-year due to continued spending on artificial intelligence development, a trend that is expected to affect profit margins in subsequent quarters.
Alphabet's and Tesla's losses spooked the broader technology sector, which was already weighed down by heavy losses the previous week.
More Quarterly Results
Attention remains focused on a number of upcoming earnings releases, with more results due in today's trading session from companies such as International Business Machines (IBM), Qualcomm Incorporated (QCOM), ServiceNow (NOW), AT&T (T), Ford (F) and General Dynamics Corporation (GD).
Markets were also watching for any developments in the US presidential race, after President Joe Biden decided over the weekend to drop out of the race and endorse Vice President Kamala Harris as the Democratic Party's front-runner.
According to a Reuters poll, Harris appeared to take a small lead over Republican Party candidate Donald Trump.
US Inventories Boost Crude Oil Prices
Crude oil prices rose on Wednesday, overcoming three straight sessions of declines, as falling US crude inventories boosted demand expectations in the world's biggest consumer.
Data from the American Petroleum Institute showed US crude inventories fell by 3.9 million barrels the previous week, compared with forecasts for an increase of 0.7 million barrels.
The API data, if ratified by official inventory data to be released later in the session, would mark the fourth consecutive week of inventory drawdowns, as demand for oil is expected to increase with the travel-filled summer season.