Wall St ends slightly lower with Big Tech earnings on deck
Wall Street's main indexes ended slightly lower on Tuesday, having given up meager intraday gains in the final minutes of trading, as investors switched their focus to the latest earnings from Alphabet and Tesla .
The duo kicked off results from the so-called Magnificent Seven stocks after the market closed, with both recording positive revenue numbers for the second quarter,
Tesla
recorded a surprise rise in revenue as it handed over more vehicles than analysts had expected, helped by price cuts and incentives.
Alphabet
, meanwhile, surpassed revenue estimates driven by a rise in digital advertising sales and healthy demand for its cloud computing services.
Before publishing numbers though, the electric vehicle maker's dropped 2%, with the Google parent's shares rising 0.1%.
Earnings from technology giants will be key in determining if 2024's record rally can be sustained, or if U.S. stocks are overvalued. The question of whether a rotation away from megacaps in favor of underperforming sectors will continue is also on investors' minds.
The small-cap Russell 2000 was up 1% on the day.
«We're paying attention to earnings, as that's what matters this week and next, and the price reaction to those earnings will be very telling,» said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers.
On the rotation into smaller-cap stocks, he added: «The jury is still out and we need some more proof of evidence that this is sustainable, and that's again going to come down to earnings.»
The megacaps
