Market Recap | Tech Stocks Tumble, Pushing Nasdaq Lower

A steep drop in shares of $Alphabet(GOOGL)$ , $Amazon.com(AMZN)$  and other technology companies dragged the $NASDAQ(.IXIC)$ into correction territory Wednesday.

The tech-heavy index slid 2.4% in a punishing session that pulled it down more than 10% from its recent high. Its losses accelerated in the afternoon, sending the gauge to one of its worst one-day declines of the year.

The $S&P 500(.SPX)$ fell 1.4%, closing at its lowest level since May. The $DJIA(.DJI)$  shed 105 points, or 0.3%.

Shares of Google-parent Alphabet tumbled almost 10% after reporting quarterly results that showed disappointing growth in its cloud business. The company shed more than $166 billion in market value, its biggest one-day loss ever. Shares of Amazon.com and $NVIDIA Corp(NVDA)$  also fell, lagging behind the broader market, while fintech company Affirm and payments company Block dropped sharply.

The technology rout Wednesday punctures a rally that had dominated for much of the year. Many investors have piled into a handful of big tech stocks in a wager that they will benefit from innovations tied to artificial intelligence and keep flourishing. Now, some of that excitement is fading during a packed week for third-quarter earnings results and one of the worst bond routs in recent memory.

The yield on the 10-year Treasury note rose to 4.952% on Wednesday and breached 5% on Monday for the first time in 16 years. Yields rise as bond prices fall.

To some analysts and investors, the recent volatility is a harbinger of more turmoil ahead and a wake-up call that the stock market's stars -- megacap tech stocks -- are susceptible to sharp swings after their results. $Meta Platforms(META.US)$ and $IBM Corp(IBM.US)$ report this week, and investors are bracing for more dramatic moves.

$Texas Instruments(TXN.US)$ also reported lackluster third-quarter earnings results, weighing on other semiconductor stocks. Shares of Texas Instruments shed 3.5%. Nvidia lost more than 4.3%, and $Advanced Micro Devices(AMD.US)$ and $Intel(INTC.US)$ each dropped around 5%.

Though tech stocks were among the hardest hit, the losses were broad. Nine of 11 of the S&P 500's sectors notched declines, including the healthcare and real-estate groups. The $Russell 2000 Index(.RUT.US)$ of small companies, which has been flashing a recession signal, dropped 1.7% and sank deeper into the red for the year.

Of course, it hasn't been all bad; cloud results at $Microsoft(MSFT.US)$ gave its shares a boost. The stock added 3.1%.

Investors remained focused on the government-bond market, which has been prone to wild daily swings. Some businesses are feeling the heat from the sharp rise in mortgage rates, which have ascended alongside Treasury yields.

Shares of $TransUnion(TRU.US)$, one of the three major credit-reporting firms, fell 7.1% Wednesday after a 23% swoon in the prior session. The company, which provides credit scoring and related tools for lenders' underwriting decisions, cut its expectations for this year and pulled its 2025 financial targets, after lower mortgage activity dented its business. Executives also flagged a broader slowdown in banks' consumer lending.

$Home Depot(HD.US)$ shares have slid for seven consecutive sessions, the longest losing streak since 2016, before a rush to buy homes and fix them up during the pandemic sent shares to records.

Some investors said the market was due for a turbulent stretch after the S&P 500 and Nasdaq climbed for much of the year.

Still, Adam said he expects bond yields to moderate and for the economy to slow in coming months.

Many investors remain hungry for risk. Bitcoin prices have soared to some of their highest levels in more than a year lately, in part because of hopes that an exchange-traded fund tied to the cryptocurrency will be approved by regulators.

@TigerStars  @CaptainTiger  @Daily_Discussion  @TigerWire  @Tiger_chat  @Tiger_comments  @MillionaireTiger