The Market News Today: Nasdaq Tech Giants’ Earnings Drag Futures Lower Amid Broader Market Strength

Tech Giants’ Earnings Drag Nasdaq Futures Amid Broader Market Resilience

Nasdaq futures dipped following disappointing earnings from Alphabet and Tesla, while S&P 500 and Dow futures also fell. Despite this, the broader market remains resilient, with 80% of reporting S&P 500 companies beating expectations. Investors are pricing in potential Fed rate cuts and growing confident in a soft landing. The market rally continues, particularly in rate-sensitive sectors, as the economy shows ongoing growth and corporations demonstrate effective management in the current environment.

Tesla Shares Plunge on Weak Q2 Earnings, Musk Touts Future Tech

Tesla’s stock dropped over 8% following disappointing Q2 earnings, with automotive revenue falling 7% year-on-year. The company faces pressure from price cuts and rising competition, particularly in China. Despite being the top EV seller in the U.S., Tesla is losing market share. Musk promises a new affordable car in 2024 and emphasizes future technologies like robotaxis, aiming for the first autonomous ride next year. However, Musk’s history of missed deadlines and the company’s aging product line continue to concern investors.

Alphabet Meets Q2 Expectations, Cloud Shines Despite YouTube Ad Miss

Alphabet reported second-quarter results largely in line with analyst estimates, with revenue up 14% year-over-year to $84.74 billion. While YouTube advertising revenue fell short of expectations, Google Cloud surpassed $10 billion in quarterly revenue for the first time. The company’s core search advertising business continued to grow, albeit at a slower pace than Q1. Alphabet also announced a $5 billion investment in Waymo, its self-driving car unit. Despite mixed results, the company’s performance underscores its ongoing strength in search and cloud services.

Chinese EV Stocks Tumble as Tesla Earnings Miss, GM Delays Plans

Major Chinese electric vehicle companies’ shares dropped following Tesla’s disappointing earnings and General Motors’ decision to delay EV plans. Tesla reported a 7% revenue decline, while GM postponed its second U.S. electric truck plant and Buick’s first EV. The EV industry faces challenges including high production costs and waning investor enthusiasm. Tesla’s CEO Elon Musk discussed robotaxi plans but acknowledged past overly optimistic predictions. The sector’s downturn reflects a broader reality check for the EV market amid economic pressures and shifting consumer demand.

Euro Zone Business Growth Stalls as Manufacturing Slump Offsets Services

Euro zone business activity growth stagnated in July, with the HCOB composite PMI dropping to 50.1. The services sector’s modest expansion failed to counter manufacturing’s deeper downturn. Business expectations declined, hitting a six-month low. Manufacturing faced falling demand and reduced headcount, while services saw higher input costs but slower price increases. This mixed performance could influence the European Central Bank’s future policy decisions. Meanwhile, the U.S. is set to release its own PMI data, with expectations of mixed trends in private sector activity.