- US stocks dropped on Wednesday led by a selloff in the tech sector.
- Uber and Intel shares declined as traders fretted over earnings and weak guidance.
- Tesla also fell after Reuters reported on a probe of the company's claims about its autopilot capabilities.
US stocks slid on Wednesday, led by a sell-off in the tech sector as investors took in weak financials and earnings guidance.
Major indexes ticked lower in early-morning trading, with the Nasdaq Composite slumping 0.6%.
Uber shares were down about 5% after the rideshare service posted a $654 million loss over the first quarter. Intel dropped 2.5% after the company trimmed its guidance. Tesla shares slumped 3.5% amid reports the Justice Department is looking into the company's claims about its autopilot feature and whether statements about the technology mislead investors.
Corporate earnings are doing well overall. The S&P 500 is expected to post at least 7% earnings growth over the first quarter, and 77% of the companies that have reported so far have beat earnings estimates, according to FactSet.
Investors, though, remain concerned over the outlook for a recession and coming rate cuts this year.
"Should rates stay this elevated for another 6-12 months, too much corporate debt and real estate debt faces a rate reset that increases the possibility of real economic impact from such tightening," David Bahnsen, the chief investment officer of The Bahnsen Group said in a note on Wednesday.
Markets are pricing in just 1-2 rate cuts by the end of the year, according to the CME FedWatch tool, implying that the Fed funds rate will stay close to 5%. Meanwhile, the New York Fed is pricing in a 58% chance the US could slip into recession by March of next year.
Here's where US indexes stood at the 9:30 a.m. opening bell on Wednesday:
- S&P 500: 5,167.00, down 0.4%
- Dow Jones Industrial Average: 38,846.94, 0.1% (-37.32 points)
- Nasdaq composite: 16,233.30, down 0.58%
Here's what else happened today:
- Warren Buffett warned of AI scams, a fiscal disaster, and losing friends.
- Disney stock slid on revenue and streaming misses over the last quarter.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil slumped 0.73% to $77.81 a barrel. Brent crude, the international benchmark, fell 0.73% to $82.55 a barrel.
- Gold slipped 0.21% to $2,309.40 per ounce.
- The 10-year Treasury yield rose two basis points to 4.49%.
- Bitcoin dropped 2.5% to $62,088.
