Wall Street Just Had Its Worst Day Since 2022

Investors were rattled by profit reports from Tesla, Alphabet
By Newser Editors and Wire Services
Posted Jul 24, 2024 3:49 PM CDT
Wall Street Just Had Its Worst Day Since 2022
The New York Stock Exchange is shown on June 18, 2024.   (AP Photo/Peter Morgan, File)

A wipeout on Wednesday sent US stock indexes to their worst losses since 2022 after profit reports from Tesla and Alphabet helped suck momentum from Wall Street's frenzy around artificial-intelligence technology.

  • The S&P 500 tumbled 128.61 points, or 2.3%, to 5,427.13 for its fifth drop in the last six days.
  • The Dow Jones Industrial Average dropped 504.22 points, or 1.2%, to 39,853.87
  • The Nasdaq composite skidded 654.94 points, or 3.6%, to 17,342.41.
The profit reports from Tesla and Alphabet weren't disasters, but they raised questions among investors about which other market heavyweights' springtime results could fall short of expectations, says Sam Stovall, chief investment strategist at CFRA.

"How many disappointments are we likely to see? Maybe let's sell first and ask questions later," Stovall says.

  • Tesla was one of the heaviest weights on the market and tumbled 12.3% after reporting a 45% drop in profit for the spring, and its earnings fell short of analysts' forecasts, the AP reports..
  • At Alphabet, meanwhile, investors' patience with the company's big AI investments may also be running thinner. Alphabet dropped 5% even though it delivered better profit and revenue for the latest quarter than expected. Analysts pointed to some pockets of weakness underneath the surface, including weaker growth in advertising revenue for YouTube than expected. They also said increased AI investments and other spending could crimp how much cash it generates.

AT&T was a bright spot for the stock market, rising 5.2% after its profit for the latest quarter matched analysts' expectations. Mattel jumped 9.8% after topping expectations for profit, aided by growth for its Fisher-Price and Hot Wheels lines. The problem for Wall Street is that even if more stocks were to rise, they'll need to do so by more than Big Tech stocks are falling because of how much influence that small group carries. Nvidia, for example, fell 6.8%. That wasn't as steep as Tesla's drop, but it was still the single heaviest weight on the S&P 500 because its total market value tops Tesla's.

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Outside of Big Tech, Lamb Weston lost 28.2% for the worst loss in the S&P 500 after the supplier of French fries and other frozen potato products reported weaker profit for the latest quarter than expected. The company said fewer diners visited restaurants during the spring than it expected. It also warned challenges could continue into its upcoming fiscal year because of softer demand due to "menu price inflation." (More stock market stories.)

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