4:14pm: Silicon Valley Bank results cast shadow over the session
The Dow ended Tuesday down 355 points, 1%, at 33,531, the Nasdaq Composite fell 238 points, 2%, to 11,799 and the S&P 500 slid 65 points, 1.6%, to 4,072. The small-cap Russell 2000 index lost 42 points, 2.4%, to 1,747.
Tech stocks were a major drag on the market, even as Alphabet and Microsoft lined up to report earnings after the closing bell.
However, Silicon Valley Bank earnings seemed to spook investors. Shares of the regional bank fell nearly 50% after it reported that deposits dropped 40% to $104.5 billion in the first quarter
“For the first time since this earnings season has started, we’ve actually seen the market react,” said Art Hogan, chief market strategist at B Riley Wealth Management. “There’s been a built up, or pent up, selling reaction to earnings that are just OK, but not great. And today the floodgates seemed to have opened — and once that started, nobody seems to want to get in the way.”
12.05pm: Tech stocks lead the decline as key financial results expected this week
US stocks were lower in noon trading as investors nervously awaited financial results from Microsoft and Alphabet after the market close today.
At midday, the Dow lost 152 points to 33,724, while the S&P 500 eased 35 points at 4,102 and the tech-heavy Nasdaq slipped 137 points to 11,900.
“The tech rebound since the start of 2023 is over,” Sanders Morris Harris chairman George Ball said.
“It is almost impossible for big tech companies to continue growing revenue at the robust pace they have been used to over the past few years,” he added.
Notable movers included shares of First Republic Bank, which dropped 30% after the regional bank said its deposits fell 40% to $104.5 billion in the first quarter, but have since stabilized.
9:40am: Earnings remain in focus
US stocks moved lower at the open as investors geared up for the kick-off of Big Tech earnings, starting with Microsoft and Alphabet this afternoon.
The tech-heavy Nasdaq had fallen 0.5% or 65 points at 11,971 just after the market opened, with the S&P 500 down 0.4% or 17 points at 4,120 points and the Dow Jones was down 18 points or 0.1% at 33,857 points.
OANDA senior market analyst Craig Erlam noted that equity markets were slightly under pressure amid a wide array of earnings releases as investors eyed US data due later in the week.
“Interest rate expectations have become more hawkish in recent weeks, but investors don't appear convinced it's going to unfold that way,” Erlam said.
“We're still looking for weaknesses in the labour market and signs of inflationary pressures softening, something we could see over the next couple of months at which point expectations could be pared back once more.”
6:30am: Earnings, earnings, earnings!
US stocks are expected to open lower on Tuesday as investors await another big batch of corporate earnings including from some of the world’s largest technology companies including Google owner Alphabet.
Futures for the blue-chip Dow Jones Industrial Average (DJIA) were 0.3% lower in pre-market trading, while those for the broader S&P 500 and for the tech-laden Nasdaq-100 both fell 0.5%.
On Monday, the DJIA closed up 66 points, or 0.2%, at 33,875, while the S&P 500 added 0.1%, but the Nasdaq Composite dropped 0.3%.
First Republic Bank stock tumbled 21% in out-of-hours trading after the lender's results showed it had lost around $100 billion in customer deposits during the recent banking turmoil.
Alphabet and Microsoft are the headliners of the day's batch of mega-cap earnings, though both numbers are due after the close of trading on Tuesday. Mcdonald's, PepsiCo, United Parcel Service, and Visa are also set to release earnings during the session.
Joshua Mahoney, chief market analyst at Scope Markets commented: "With a long list of corporate earnings slated for the day ahead, US index futures are sitting very much on the back foot. Consumer discretionary and tech firms are set to dominate with names ranging from McDonalds and PepsiCo to Alphabet and Microsoft all on the list although yesterday’s impressive numbers from Coca-Cola do offer some optimism over the state of retail spending."
He added: "In terms of economic data, the release of the US House Price Index will be under some scrutiny as this could tip into negative territory month-on-month, although it would take more than a modest decline here to spook traders, given this metric has been broadly unchanged since last summer.
"Markets will also be looking towards next week’s FOMC meeting, seeking further hints that this will be the last twist in the Fed’s policy tightening gambit. Any suggestions that there’s more to come – most likely baked into Friday’s PCE Price Index - could again layer fresh downside on stocks."