4:20pm: S&P 500 closes below 4,200 for the first time since May
The Dow closed Wednesday down 105 points, 0.3%, at 33,036, the Nasdaq Composite lost 319 points, 2.4%, to 12,821 and the S&P 500 declined 61 points, 1.4%, to 4,187. The small-cap Russell 2000 index fell 27 points, 1.6%, to 1,653.
The S&P 500 closed below the 4,200 watermark for the first time since May. The broad selloff was sparked in part by Alphabet, shares of which fell more than 9% on disappointing quarterly results headlined by a soft cloud growth forecast.
Meanwhile, the 10-year Treasury yield rose 11 basis points to 4.954%, after trading above 5% earlier this week.
“Earnings are dominating the headlines, but I can’t take my eyes off the bond market,” said Ed Moya, senior market analyst at Oanda. “We haven’t seen this skyrocketing pace in yields since 1982 and that should spell trouble for stocks.”
12:00pm: Nasdaq extends losses, blue-chips rally
US stocks remained mixed with the Nasdaq sharply lower, hit by Alphabet's falls, while blue-chips held modest gains.
At midday, the Dow Jones Industrial Average was up 70.89 points, 0.2%, at 33,212.27, the S&P 500 was down 39.54 points, 0.9%, at 4,208.14 and the Nasdaq Composite was down 232.22 points, 1.8%, at 12,907.66.
Alphabet was down 9.3% after its poorly received results while Microsoft continued to prosper, up 2.3%.
Craig Erlam at Oanda said: "The clear difference maker was AI which gave Microsoft the edge and a strong start to trading today. Alphabet is a little behind the curve and that's come at an early cost for its cloud business which, unlike Microsoft, saw slower growth."
"It goes to show how much emphasis investors are putting on the cloud and AI that Alphabet overall reported stronger than expected revenue and earnings but has been punished with shares falling in early trade."
In economic news, sales of new single-family homes in September unexpectedly increased to the highest level since February 2022, as a lack of secondary market inventory strengthened demand for new builds despite high mortgage rates.
Sales increased to an annualised rate of 759,000 in September, from an upwardly revised rate of 676,00 in August, beating economists’ forecast for 680,000 new home sales.
New home sales rose 34% from a year ago, as sales of existing homes plunged to the lowest level since 2010 in September.
9:45am: Heavy falls in Alphabet drags Nasdaq lower
Heavy falls in Google owner Alphabet dragged the Nasdaq lower in early trading while blue-chips eked out modest gains.
Shortly after the opening bell, the Dow Jones Industrial Average was up 35.20 points, 0.1%, at 33,176.58, the S&P 500 was down 29.20 points, 0.7%, at 4,218.48 and the Nasdaq Composite was down 157.76 points, 1.2%, at 12,982.12.
Alphabet paid the price for disappointing cloud earnings which sent the stock 8.3% lower, but there was better news for shareholders in Microsoft where results pleased the market sending shares up 3.5%.
AJ Bell head of financial analysis Danni Hewson said: "Microsoft and Alphabet both delivered better than expected earnings although there was some divergence in the reaction, with the former higher and the latter lower on their respective numbers."
"Microsoft’s head start in AI seems to be paying off, while Alphabet appears to be in catch-up mode on both this and cloud computing."
On another busy day of earnings, Boeing flew 3.2% higher after reporting narrowed third quarter losses and an increase in revenue but T-Mobile eased 1.3% despite raising guidance.
Later, results from Meta and IBM will give a further gauge of the tech market.
7:00am: Nasdaq expected to open lower after mixed results
US stocks are expected to open mixed, with tech stocks on the back foot as investors reflect on results from Google owner, Alphabet and Microsoft after Tuesday's close.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.2% higher, while those for the S&P 500 were down 0.3%, and contracts for the Nasdaq 100 futures fell 0.6%.
Shares of Microsoft jumped 4.0% following stronger-than-expected results in the fiscal first quarter with investors particularly enthused on the company’s revenue growth, particularly from its Azure cloud segment.
Meanwhile, Alphabet shares tumbled 6.5% as its cloud business missed analysts’ estimates, overshadowing its revenue growth and earnings beat.
Commenting on Microsoft, Dan Ives at Wedbush said it had “delivered a much needed quarter for the bulls featuring top and bottom-line beats driven by 29% Azure growth which came in above Street expectation of 26% as the company saw heightened demand across its entire product portfolio with the infusion of AI across its tech stack.”
The earnings season remains in full swing with results from Meta Platforms, IBM and Mattel after the closing bell.
Ahead of that Boeing, Moody’s, Hess and Hilton are all due to report.
In economic news, new home sales in the US are expected to edge up to an annualised rate of 6.8 million units in September from 6.75 million units in August, as limited supply of existing homes boosts demand for new builds.