Futures Overview:
S&P 500 futures: Down 0.7%
Dow Jones Industrial Average futures: Falling 0.5%
Nasdaq 100 futures: Slipping 0.9%
Market Performance Recap :
Dow Jones Industrial Average: Down 57 points, or 0.14%, closing at 40,358
S&P 500: Declined 9 points, or 0.16%, ending at 5,556
Nasdaq Composite: Dropped 10 points, or 0.06%, to 17,997
Market Impact:
Nasdaq futures are leading the decline early Wednesday following underwhelming earnings reports from two major members of the Magnificent 7: Tesla and Alphabet. Tesla’s shares have fallen approximately 7% in premarket trading, while Alphabet’s stock is down nearly 3%. Analysts are expressing concerns about the sustainability of the recent AI-driven market surge that had previously propelled stock prices to record highs.
Steve Clayton, head of equity funds at Hargreaves Lansdown, remarked, “If last night’s news is any indication, 2024 might be characterized by the So-So Seven, as Tesla and Alphabet’s results were insufficient to maintain their stock momentum.”
Clayton further noted, “AI has been a significant driver of market expectations, contributing to a remarkable revenue surge for Nvidia as cloud units of tech giants like Google, Amazon, and Microsoft expand their capacities. However, there is growing scrutiny on whether this scale will translate into returns on capital, with current results still pending.”
The cautious outlook from these tech giants has led to broader market concerns, influencing futures trading and dampening investor sentiment.
