Dow Jones Today: Major US Indexes Set to Open Sharply Lower as Tech Stocks Tumble

Big S&P 500 Movers on Wednesday

2 hr 1 min ago

Decliners

• The sharpest losses in the S&P 500 belonged to shares of Lamb Weston Holdings (LW), which plummeted 28% after it reported weaker-than-expected revenue and earnings per share (EPS) for its fiscal fourth quarter. The manufacturer of frozen potato products cited declining restaurant traffic in the U.S. and key international markets amid higher menu prices as a reason for the lackluster performance. The company also guided for fiscal 2025 sales and profits falling below consensus estimates.
• Tesla shares fell 12% after the electric vehicle maker reported a 45% year-over-year decline in profits for the second quarter, missing analysts’ expectations. Although quarterly revenue ticked higher from a year ago and exceeded forecasts, lower average selling prices and delivery numbers dragged on Tesla’s profitability. The company said it would focus on lowering production costs, developing lower-cost vehicles, and progressing on artificial intelligence projects including its humanoid robots and robotaxi.
• Stocks that had been surging in 2024 amid lofty AI expectations posted significant losses during Wednesday’s rout. Enthusiasm about meeting power demand from AI data centers helped propel shares of power generator Vistra (VST) to an all-time high in May, but the stock has been trending downward since then, and it slipped 9.4%. Shares of server and data storage provider Super Micro Computer (SMCI) dropped 9.2%. Other heretofore AI darlings, including semiconductor giants, also fared poorly.
• Shares of Roper Technologies (ROP), which provides software and tech-enabled products to a variety of markets, sank 7.4% after the company missed second-quarter revenue estimates and provided a lower-than-expected profit forecast for the current quarter. The soft outlook reflects restrained spending by Roper’s clients, with businesses limiting spending and putting off contract renewals amid economic uncertainties and elevated interest rates.

Advancers

• Enphase Energy (ENPH) shares notched Wednesday’s best performance of any S&P 500 stock, soaring 13% after the manufacturer of solar and EV charging equipment released its quarterly report. Although second-quarter sales and profits fell short of estimates, Enphase guided above expectations for the third quarter. The company touted progress in normalizing its inventory.
• AT&T (T) also posted slightly lower-than-expected revenue and earnings for the second quarter, but the telecommunications giant exceeded forecasts for postpaid customer additions during the period, and its shares jumped 5.2%. AT&T’s free cash flow (FCF) also came in ahead of estimates, and management predicted that full-year FCF will surpass last year’s figure.
• Shares of NextEra Energy (NEE) advanced 4.6% after the renewable energy provider beat quarterly profit estimates and provided an upbeat outlook. The company expressed confidence in its opportunities to replace less efficient forms of power generation and to fulfill the increasing demand for energy arising from various industries.
  
  

–Michael Bromberg

The Worst Day in Years for the Nasdaq

2 hr 17 min ago

The Nasdaq lost 654 points, or 3.6%, on Wednesday, in its biggest one-day drop since falling almost 3.9% on October 7, 2022.

In terms of points, it was the index’s worst day since March 16, 2020, the day the onset of the Covid-19 pandemic led the Federal Reserve to drop interest rates to nearly 0%.

Wednesday’s rout erased an estimated $985 billion off the market capitalization of the $27 trillion Nasdaq. 

–Colin Laidely

Magnificent Seven Stocks Have Worst Day on Record

3 hr 45 min ago

The Roundhill Magnificent Seven ETF suffered its largest intraday decline on record on Wednesday.

Investors fled America’s tech giants after earnings reports from (TSLA) and Alphabet (GOOGL) raised concerns about the cost of artificial intelligence investments and the sustainability of the Mag Seven’s blistering earnings growth.

Still, the group is expected to report that aggregate second-quarter earnings grew three times faster than the S&P 500 as a whole (30% vs. 10%).

Despite a recent patch of volatility and Wednesday’s steep losses for each member of the group, all but one of the Magnificent Seven stocks are in positive territory for the year, with Tesla being the outlier.

–Colin Laidley

Lamb Weston Stock Swoons as Frozen Potato Demand Softens

5 hr 29 min ago

Lamb Weston (LW) shares plunged Wednesday after the food processing company’s fiscal fourth-quarter results missed expectations on the top and bottom lines.

CEO Tom Werner said demand for frozen potatoes softened due to inflation.

“The operating environment has changed rapidly over the past 12 months as global restaurant traffic and frozen potato demand softened due to menu price inflation continuing to negatively affect global restaurant traffic,” Werner said.

Lamb Weston shares were down 27% in recent trading, at their lowest level in more than two years.

–Andrew Kessel

AT&T Shares Among Top S&P 500 Gainers After Earnings

7 hr 27 min ago

AT&T (T) shares rose Wednesday after the company reported second-quarter results that were boosted by the addition of more new subscribers than analysts had expected.

The stock was up more than 5% in recent trading, making AT&T one of the top gainers on the S&P 500 for the day. The stock has gained about 23% over the past year.

The telecommunications titan reported 419,000 new postpaid subscribers, well above the 251,800 expected by analysts, according to Visible Alpha. 

AT&T posted diluted earnings per share of 49 cents on revenue of $29.8 billion, both of which were slightly below analysts’ expectations. The company reiterated previous guidance for full-year adjusted earnings of $2.15 to $2.25 per share.

–Andrew Kessel

Alphabet Shares Fall on Cost Concerns Despite Earnings Beat

8 hr 37 min ago

Shares of Google parent Alphabet (GOOGL) lost ground Wednesday amid concerns about the tech giant’s spending on artificial intelligence (AI) investments, despite an earnings beat.

However, several analysts suggested worries about costs could be overblown, and raised their price targets for the stock on Google’s strengths, as well as early benefits from AI.

Citi analysts raised their price target for the stock to $212 from $190, while J.P. Morgan analysts lifted their price objective to $208 from $200.

Alphabet shares were down close to 4.7% at $173.28 in late-morning trading Wednesday, though they’ve still gained 23% since the start of the year.

–Naomi Buchanan

Thermo Fisher Rises on Strong Earnings

9 hr 4 min ago

Thermo Fisher Scientific (TMO) shares were on the rise after the medical device manufacturer reported better-than-expected second-quarter results and raised its projections for the full fiscal year.

The company reported a 14% year-over-year increase in net income to $1.55 billion, well above analysts’ expectations. Revenue was $10.54 billion, down 1% from a year ago but slight above estimates.

After issuing warnings about a potentially lower sales outlook at the start of the year, Thermo Fisher’s solid Q2 results led the company to adjust its internal projections for the full fiscal year. Thermo Fisher now projects revenue within a range of $42.4 billion to $43.3 billion, a higher floor than the previous range of $42.3 to $43.3 billion. 

Thermo Fisher shares were up more than 2% in recent trading. The stock is up about 6% since the start of the year.

–Aaron McDade

Tesla Levels to Watch as Stock Plunges

10 hr 26 min ago

Tesla shares fell more than 10% in early trading Wednesday after the electric vehicle maker posted a 45% drop in second-quarter profit, reported a reduction in the average selling price of its vehicles from a year earlier, and cautioned about a rise in artificial intelligence (AI) costs.

Despite bullish technicals, Tesla shares sit poised to change gear after the company’s weaker-than-expected quarterly results, according to our technical analysis.

Amid post-earnings selling, the stock could attract buying interest at key chart levels including $220 and $198. if Tesla shares resume their uptrend, the measuring principle projects a price target of $360.

Tesla shares were down 11.1% at $219.04 in recent trading.

–Timothy Smith

Futures Point to Lower Open for Major Indexes

11 hr 30 min ago

Futures tied to the Dow Jones Industrial Average were down 0.4%.

S&P 500 futures were off 0.9%.

Nasdaq 100 futures were down 1.4%.