NEW YORK: Wall Street slipped on Wednesday, weighed down by Netflix’s underwhelming outlook, which dampened sentiment as investors braced for Tesla’s results due after the closing bell and sifted through a wave of corporate reports.
Tesla’s results will kick off the ‘Magnificent Seven’ earnings lineup — a tech-heavy group that now commands nearly 35 percent of the S&P 500’s market cap, making their performance critical to the market’s next move.
The carmaker lost nearly 2 percent, while a handful of other mega-caps also took a hit on the day. Shares of streaming giant Netflix plunged 10.2 percent.
With valuations stretched and stocks hovering near record highs, investors are looking for more than just earnings beats — they want reassurance that Big Tech can still deliver.
“The most critical task for this market over the next couple of weeks is going to be the Mag 7 earnings,” said Alex Coffey, senior trading and derivatives strategist at Charles Schwab.
The big question is whether “the mega-cap tech earnings (would) look like Netflix or are they going to be more positive.”
At 11:17 a.m. ET, the Dow Jones Industrial Average fell 109.83 points, or 0.23 percent, to 46,814.91. The S&P 500 lost 20.27 points, or 0.30 percent, to 6,715.08, while the Nasdaq Composite lost 153.97 points, or 0.67 percent, to 22,799.70.
Texas Instruments lost 7.7 percent after the chipmaker forecast fourth-quarter revenue and profit below analysts’ estimates. The decline weighed on the Nasdaq.
Peers Microchip Technology and ON Semiconductor lost more than 3 percent each. Analog Devices dropped 2.7 percent.
Intuitive Surgical jumped 15.9 percent after the company beat third-quarter estimates.
AT&T fell 1.3 percent even as it added more wireless subscribers than expected for the third quarter.
Wall Street is deep into earnings season, with major corporations largely delivering upbeat results. Analysts expect third-quarter earnings of S&P 500 companies to grow 9.2 percent over the year earlier, compared with an 8.8 percent increase estimated at the start of the month, according to LSEG data.
Yet, investors are treading cautiously through a landscape clouded by bleak economic data, renewed tariff tensions and profit-booking, all while trying to gauge the true health of corporate America.
Despite recent signs of tensions thawing between Washington and Beijing, uncertainty swirled around US President Donald Trump’s potential meeting with Chinese President Xi Jinping.
A planned summit between Trump and his Russian counterpart Vladimir Putin was also put on hold.
Trump refused to meet top Democrats until the three-week-old government shutdown ends, leaving the Federal Reserve short on data ahead of next week’s policy meeting. Friday’s data — with core CPI expected to hold at 3.1 percent — may be the central bank’s only clear read on inflation.
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