Wednesday saw a mostly negative reaction to quarterly results from a number of key tech firms, leading to a downturn in the market. The Nasdaq experienced a particularly harsh fall, prolonging the decline observed in the previous session. Presently, the Nasdaq is slightly above its session low, falling 247.55 points or 1.6%, at 15,262.34.
The S&P 500 has also experienced a drop, falling 43.30 points or 0.9% at 4,881.67. In contrast, the more narrowly-focused Dow has resisted the downtrend, improving by 25.82 points or 0.1% at 38,493.13.
A substantial fall in Alphabet's shares is pressuring the tech industry, with the company, which owns Google, plunging by 6.4%. Despite revealing fourth quarter results that surpassed estimations on both principal and secondary lines, Alphabet faces pressure due to weaker than predicted ad revenue.
Shares in chipmaker Advanced Micro Devices (AMD) also fell by 4.5% after presenting fourth quarter earnings that matched anticipations but disappointed with first quarter guidance. Microsoft shares also dipped following better than expected second quarter fiscal results but projected third quarter revenues that fell short of estimations.
Conversely, a rise in the Dow is credited to a surge in Boeing shares, which increased by 3.9% after the aerospace pioneer reported a smaller than forecasted fourth quarter loss.
Ahead, traders look to the Federal Reserve’s high-interest monetary policy declaration. While it is predicted that interest rates will be unchanged, the joining statement may influence rate outlooks significantly.
There is a diminishing expectation for a March rate cut, with many economists suggesting the Fed will delay rate reduction until May.
According to US economic news, a report from payroll processor ADP revealed that private sector job growth in the US decelerated more than projected in January. It was found that private sector employment rose by 107,000 jobs in January, following an adjusted increase of 158,000 jobs in December, which fell short of the anticipated increase of 145,000 jobs.
Networking stocks experienced several of the market's most severe downturns, with the NYSE Arca Networking Index falling by 2.4%. The index continued to retreat from the six-month high it set on Monday.
Significant weakness was also observed in semiconductor and software stocks, contributing to the Nasdaq's considerable fall. Oil service stocks also suffered, evidenced by the 1.5% loss registered by the Philadelphia Oil Service Index, a symptom of the notable recoil in crude oil prices.
In contrast, gold stocks and the price of the precious metal saw a sharp ascent, pushing the NYSE Arca Gold Bugs Index up by 1.7%. Interest-rate utilities and commercial real estate stocks also performed well ahead of the Fed’s monetary policy announcement.
Internationally, stock markets across the Asia-Pacific region showed mixed results on Wednesday. Japan's Nikkei 225 Index rose by 0.6%, while China's Shanghai Composite Index fell by 1.5%. Major European markets also experienced a downturn. Germany's DAX Index fell by 0.4%, while the UK's FTSE 100 Index and the French CAC 40 Index both fell by 0.1%.
In the bond market, ahead of the Fed’s monetary policy announcement, treasuries have risen sharply. This has resulted in a fall of 9.6 basis points at 3.963% for the yield on the ten-year note, which inversely correlates with its price.
