The S&P 500 fell on Wednesday, down 0.48%, as Wall Street assessed technology earnings reports and their potential impact on the market.
The index’s slide could have been fueled by a series of earnings reports from major technology companies that failed to meet investor expectations. Microsoft, for one, reported robust earnings, but its cloud computing segment Azure, which has been a major revenue driver, saw slower growth.
Meanwhile, Alphabet, Google’s parent company, reported revenue growth for the quarter that beat analyst predictions. However, its cloud division, known as the Google Cloud Platform, also created some concern. Although the division’s revenue jumped 45% in the quarter, the growth was slower than the previous period and the report noted Google Cloud has yet to turn a profit.
Other big tech players such as Apple and Facebook yet to release their quarterly results also kept investors nervous and on edge, speculating about future market movements.
Furthermore, shifts in buying trends to cyclical and company-specific stocks could have also put pressure on the S&P 500. Investors appear to be looking for companies with strong growth forecast and are favoring them over tech giants.
Energy and industrial companies, for example, saw a boost on Wednesday. Investors seemed to be moving towards industries they believe will benefit most from the economy reopening, with travel, leisure, and hospitality stocks also seeing an uptick.
Overall, the stock market appears to be in a period of volatility and uncertainty, largely driven by concerns over tech sector earnings and shifts in investor behavior. The tech sector has been a significant driver of the stock market’s rise over the last year.
