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The tech-heavy Nasdaq composite sold off Wednesday morning, as tech titans Alphabet (GOOGL, $94.93) and Microsoft (MSFT, $231.32) dived on quarterly earnings results. The Nasdaq Composite was down 2%, while the S&P 500 pushed lower by 0.7%, breaking three-day winning streaks for the indices.
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Shares of Google-parent Alphabet dropped 9.1% after the tech giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, which spurred investors to deliberate the outlook for other tech companies that rely on ad spending.
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Meanwhile, Microsoft declined 7.7% after the tech giant reported weak cloud revenue in its latest quarterly results, despite beating earnings and revenue estimates. The company also issued current-quarter revenue guidance that fell short of expectations. The downturn rippled across the tech sector. Meta Platforms (META, $129.82) fell 5.6% before its earnings miss, while Amazon (AMZN, $115.66) dropped 4.1%.
Why it matters
The swings in the major indexes reflect a “tug of war” between corporate America and the Federal Reserve that has left investors attempting to balance what companies are reporting and what that means for future interest rate hikes.
