Nasdaq 100: Tech Stocks Fall as Tesla and Alphabet Earnings Disappoint

Tech Giants’ Earnings Disappoint, Pressuring Nasdaq Futures

Nasdaq-100 futures traded lower Wednesday as investors reacted to underwhelming quarterly reports from tech giants Tesla and Alphabet. These reports provide the first glimpse into megacap performance for Q2, a crucial indicator given their outsized impact on market gains this year.

At 12:26 GMT, Dow Futures are trading 40444.00, down 171.00 or -0.42%. S&P 500 Index Futures are at 5554.25, down 45.00 or -0.80% and the Nasdaq Composite is at 19679.50, down 245.50 or -1.23%.

Tesla Shares Plunge on Weak Q2 Results

Tesla stock dropped over 8% in premarket trading following disappointing Q2 earnings. The electric vehicle maker reported a 7% year-over-year decline in automotive revenue to $19.9 billion, with adjusted earnings margins also falling. The company has been forced to slash prices globally amid slowing sales and rising competition, particularly in China.

Despite remaining the top EV seller in the U.S., Tesla is losing market share to competitors. Investors are closely watching for the introduction of a new mass-market car, which CEO Elon Musk said is on track for delivery in the first half of next year.

Alphabet Slips Despite Beating Expectations

Shares of Google parent Alphabet fell 3.8% in premarket trading. While the company reported top and bottom line beats, YouTube advertising revenue fell short of consensus estimates, causing concern among investors.

Other Notable Stock Movements

Texas Instruments rose 2% on better-than-expected Q2 earnings.

Madison Square Garden Entertainment gained 3.3% following a Goldman Sachs upgrade.

Visa pulled back over 3% after missing fiscal Q3 revenue estimates.

AT&T added almost 3% on strong wireless subscriber growth.

Market Forecast

The market outlook remains cautiously optimistic, with investors pricing in the possibility of Federal Reserve rate cuts in September. However, the underwhelming performance of key tech stocks may dampen enthusiasm in the short term. Upcoming economic data releases, including PMI readings and the Fed’s preferred inflation gauge, will likely influence market sentiment in the coming days.

While the broader market has shown resilience, the weakness in megacap tech earnings could lead to a pullback in the Nasdaq and potentially spill over to other sectors. Traders should remain vigilant and monitor upcoming earnings reports and economic indicators for further direction.

Technical Analysis

E-mini Nasdaq-100 Index futures are lower shortly before the cash market opening. The tech-weighted index is also trading on the bearish side of a 50% level at 19742.25 and the 50-day moving average at 19689.15. Both are signaling impending weakness.

A sustained move under 19689.15 will indicate the selling pressure is getting stronger. This could trigger a steep break into a longer-term pivot at 19178.50.

Overcoming and sustaining a rally over 19689.15 could ease some of the downside pressure. Tuesday’s high at 20084.75 is a potential triggerpoint for an upside breakout.