Global stock markets tumbled Wednesday following a batch of disappointing corporate results in the United States and Europe. The slump came after US electric car giant Tesla -- one of the "Magnificent Seven" stocks that have fuelled a global rally this year -- reported a drop in second-quarter profits. Wall Street's main indices slumped, with the tech-heavy Nasdaq Composite index down 2.
5 percent in late morning trading. European and Asian markets closed lower. "The reasons for the weakness are pretty clear cut," said Briefing.
com analyst Patrick O'Hare, pointing to Tesla's report showing profits fell 45 percent in the second quarter owing to price cuts and aggressive AI investment. Tesla shares tumbled more than 11 percent. Shares in Google-parent Alphabet fell around four percent, which O'Hare put down to lower-than-expected advertising revenue at YouTube, although overall the company beat profit and revenue expectations.
Alphabet is also one of the so-called Magnificent Seven tech kings that have been key to driving gains in markets that have pushed Wall Street to multiple record highs in 2024. The others -- Apple, Amazon, Facebook-parent Meta, Microsoft and Nvidia -- are due to report over the next few weeks. "The first view on Big Tech earnings wasn't inspiring," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"Two of the Magnificent Seven stocks failed to create euphoria when they reported their second quarter results yesterday. The less-than-ideal set of ear.