On Wednesday, US stocks were trading negatively during the pre-opening session, mainly due to disappointing earnings from major tech companies. The Nasdaq is likely to struggle to rebound, with Alphabet and Tesla’s reports impacting market sentiment. Alphabet’s stock fell 1% after hours due to lower YouTube ad revenue, while Tesla’s stock dropped over 4% due to a 45% decline in second-quarter profits and reduced automotive revenue.
Earnings from Tesla and Alphabet Drive Stock Market VolatilityTesla shares continued to fall in premarket trading, and Alphabet’s stock slipped further over margin concerns. Despite these challenges, the market has recently been trending upward, particularly in small-cap stocks and industrials, driven by optimism for a soft economic landing, though some price corrections are expected.
Attention is now turning to IBM’s Q2 earnings, anticipated after market close. Sales are forecasted to rise slightly from $15.48 billion last year, but EPS is expected to dip marginally. Notably, IBM has exceeded earnings expectations for the past five quarters. Positive results from IBM could potentially mitigate some of the negative sentiment driven by Alphabet and Tesla’s performance.
Despite the current market volatility, sectors such as small-cap stocks and industrials have shown resilience, bolstered by hopes of a gentle economic landing. However, the broader market may face some corrections as it adjusts to the mixed earnings reports from major tech firms. Investors are closely monitoring upcoming earnings to gauge the overall health and direction of the market in the near term.
