Wall Street ends deep red: S&P 500 falls 2.3%, Nasdaq off 3.6%
Main U.S. indexes tumble; Nasdaq takes biggest hit
Utilities lead S&P 500 sector gainers; Tech biggest loser
Dollar slips; gold falls, bitcoin, crude gain
U.S. 10-Year Treasury yield rises to ~4.29%
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WALL STREET ENDS DEEP RED: S&P 500 SINKS 2.3%, NASDAQ DROPS 3.6%
Wall Street's three major indexes sold off sharply on Wednesday with the S&P 500 .SPX tumbling more than 2% for its biggest one-day decline since December 2022. Megacap stocks weighed heavily on the index as investors ran for the exits after results from Tesla TSLA.O and Alphabet GOOGL.O disappointed and weakness spilled over to other megacap stocks.
The sell off marked the end of a 356-day streak without a 2% daily drop for the S&P 500 which was its longest run since 2007, just ahead of the great financial crisis. Nasdaq suffered its biggest one-day drop on Wednesday since October 2022.
"The earnings report from Google last night was mixed. Tesla was flat out disappointing. Put those two together and that spilled over to the large cap tech names that were just going to be sold today," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
As if this wasn't enough of an issue for a heavily concentrated market dominated by a few megacap names, James noted that Lamb Weston LW.N - a frozen food company which is a major supplier of potatoes to restaurants - had a "notable miss and guide down" in its earnings report.
The miss might not have been so notable without "some pretty stark commentary about restaurant demand overall." This impacted the broader consumer sector as well as restaurant stocks, according to James.
The S&P 500 restaurant index .SPLRCREST closed down 0.9% hitting its lowest level since October 2023 during the session.
On top of the rough patch of earnings, he also notes that the Nasdaq 100 .NDX breached it 50-day moving average (DMA), going below it for the first time since early May, calling it a "significant technical breakdown." Both the Nasdaq Composite .IXIC and the S&P 500 also ended below their 50-DMAs.
Still of the S&P 500's 11 major industry sectors four managed to end higher with defensive utilities .SPLRCU, up about 1.2% and healthcare .SPXHC, up 0.8%, leading gains.
The biggest sector decliners were technology .SPLRCT, down more than 4%, for its biggest one-day decline since September 2022, and consumer discretionary .SPLRCD, which fell 3.9% and communications services .SPLRCL, which dropped 3.8%.
Investor jitters were also on display in the CBOE volatility index .VIX, which closed up 3.32 points at 18.04, which was its highest close since August 19.
Here is a snapshot of where markets stood shortly after close:
(Sinéad Carew, Terence Gabriel)
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