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Stock Markets Tumble Amid Tech Sell-Off and Economic Growth
2024-07-25 22:59:45
Markets
Stocks
Tech

Stock Markets Tumble Amid Tech Sell-Off and Economic Growth

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Global stock markets experienced a significant decline due to concerns over the growth of tech companies. The Nasdaq and S&P 500 saw a sharp decrease, while the Dow Jones remained positive.

The sell-off was driven by disappointing earnings from tech giants like Alphabet and Tesla. However, the US economy provided some relief as GDP data showed stronger-than-expected growth in the second quarter.

This data suggests that the economy is growing at a faster pace and may support a potential rate cut by the Federal Reserve. The tech sell-off is seen as a healthy market correction, as investors rotate away from overvalued tech stocks driven by AI enthusiasm.

As the market normalizes, small-cap stocks are expected to perform well. Despite the volatility in the market, experts remain optimistic about the future, with seasonality indicating more upside potential.

Related news on that topic:

Stock Market News: Nasdaq Sinks as Tesla and Alphabet Earnings ... Earnings Disappoint

The Nasdaq experienced a significant decline of nearly 3% as both Tesla and Alphabet reported disappointing earnings. This tech sell-off also impacted the benchmark S&P 500 and Dow, leading to a fall in chip stocks. Tesla's stock slid over 10%, and investors are now awaiting more earnings reports, as well as GDP and inflation data. The decline in tech stocks was seen as an overreaction by some analysts, who believe that the sector will benefit from the AI boom. Meanwhile, Alphabet's stock fell despite beating revenue and earnings expectations. Guidance about near-term margin pressures from AI and infrastructure led to investor concerns. Despite strong growth in key segments like Google search and cloud, the stock's long-term trajectory suggests continued margin expansion. Tesla's mixed Q2 results also disappointed investors, with lower-than-expected earnings and a vague outlook on product timelines. The company has now missed earnings targets for four consecutive quarters, raising questions about its ambitious future plans. Overall, investors are advised to be cautious of stocks with weak fundamentals and high valuations.

AI Impact: Alphabet's Profits Surge Amid Growing AI Investments

Alphabet's Q2 profits soared by 29%, fueled by AI products driving billions in cloud revenue. Despite a $2.3 billion AI research loss, net income hit $23.6 billion on $84.7 billion in revenue, surpassing forecasts. CEO Pichai highlighted a $10 billion cloud revenue milestone, with generative AI solutions reaping billions. Google's AI focus includes DeepMind and Research for ads and cloud. While Alphabet shares held steady, up 31.5% in 2024, Nvidia outperformed, soaring by 154.5%. IBM exceeded revenue estimates on software and AI strength, while Nvidia's partner Vertiv's orders surged, fueled by AI demand. Nvidia faces pressure as Alphabet and Tesla earnings impact stock, yet it may benefit from increased GPU demand from Google Cloud and Tesla's AI ventures.

Read 13 more recent news on this topic

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Yahoo Finance
25. Juli 2024 um 22:03

Stocks Caught in Tug of War Between Tech and Rest: Markets Wrap

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Updated at 4:35 PM EDT by Rob Lenihan Stocks end mixed Thursday, following from the worst day for the S&P 500 and the Nasdaq in nearly two years, as investors continued to dump megacap tech stocks and pare risky bets in markets all over the world. The Dow Jones Industrial Average finished up 81.20 points, or 0.20%, to finish the session at 39,935.07, the S&P 500 lost 0.51% to 5,399.22, while the tech-heavy Nasdaq slipped 0.93% to end the day at 17,181.72. Adam Turnquist, chief technical strate..
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The Guardian
25. Juli 2024 um 12:36

Stock markets tumble amid jitters over tech companies’ growth

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While the global tech sell-off continued, early trading on Wall Street was more subdued, with the major indices slightly up, as GDP data showed the US economy grew faster than expected in the second quarter, providing a counterpoint to the tech-driven market turmoil.
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