Stocks sold off Wednesday after the latest batch of corporate earnings intensified concerns that some of the largest US companies are struggling as rates rise and recession fears grow.
The Dow Jones Industrial Average declined by 442 points, or 1.3%. The Nasdaq Composite fell 2.3%, and the S&P 500 dropped 1.66%.
Technology stocks took the bulk of the heat as Microsoft dropped on lackluster guidance. Alphabet, Nvidia and Tesla were last down more than 3% each. Boeing fell 3% following a top and bottom line miss.
“If the company is bearish on its own future, why should investors be bullish,” said Adam Sarhan CEO of 50 Park Investments. “That’s pretty much the message we’re getting from earnings season so far.”
Investors bought stocks heading into the period anticipating better-than-expected prints as companies reset and lowered expectations. Reports so far across sectors have mostly dashed those hopes as many companies share dismal outlooks, he said.
Investors are bracing for more high-profile corporate earnings this week as fears of a recession persist. So far, more than 90 S&P 500 companies have reported fourth-quarter earnings, and 68% of them posted stronger-than-expected results, according to FactSet.
Tesla and IBM and are among the companies slated to post numbers after the bell.
Wednesday’s moves followed a three-day winning streak for the blue-chip Dow. All three major averages are trading flat, or slightly higher, for the week.