Following poor quarterly earnings from Alphabet, the parent company of Google, and a spike in interest rates, the S&P 500 ended the day below a critical threshold on Wednesday.
Amidst intense chart analyst scrutiny, the benchmark index ended the day below the 4,200 barrier, having dropped 1.4%. Since May, it had not closed below this level in the S&P 500. After the benchmark breached that level, stock losses picked up speed during the session. When the index fell 2.5% on February 21, the Nasdaq Composite lost 2.4%, marking its lowest day. It was a 0.3% decline, or 105 points, in the Dow Jones Industrial Average.
Alphabet’s robust sales growth and exceed earnings were overshadowed by a more than 9% decline in the company’s shares as its cloud division failed analyst projections. With its current dip, Alphabet’s stock is headed for its worst decrease since March 2020. 5.8% was removed from the S&P 500 communication services sector.
Apple and Amazon’s shares dropped 1.4% and over 6%, respectively, while those of other IT giants fell. After Thursday’s closing bell, Amazon is scheduled to release its third-quarter financial results.
Investor attention has been focused on corporate reports this week, but they have also been watching yields, which are close to multiyear highs. The yield on the benchmark 10-year Treasury increased by 11 basis points to 4.954%. Tech shares were damaged and investors were alarmed when it moved above 5% earlier in the week.