The Nasdaq and S&P 500 fell on Wednesday as traders weighed disappointing earnings from tech giants Microsoft and Alphabet.
The Nasdaq fell 1.9%. The S&P 500 lost 0.6%. The 30-stock Dow Jones industrial average was up 55 points, up 0.2%.
Utilities and real estate traded slightly negative as a sector at the end of the day. They joined consumer discretionary, communication services and technology in the red.
Earlier in the day, the Dow rose more than 300 points as Visa boosted the index with strong gains. The S&P 500 was also positive.
Shares in Google parent Alphabet fell 6.4% after the tech giant missed expectations on its top and bottom lines. Alphabet also reported a decline in ad revenue from YouTube, prompting investors to weigh in on the outlook for other tech companies that rely on ad spending.
Meanwhile, Microsoft declined about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite beating earnings and revenue estimates. The company also issued current quarter revenue guidance that fell short of expectations.
Swings in major indexes reflect a “tug-of-war” between U.S. companies and the Federal Reserve that has investors trying to balance what companies are reporting and what that means for rate hikes of interest, said Keith Buchanan, portfolio manager at GLOBALT Investment. He said the first of the big tech reports had particular impact because it’s an industry many investors are exposed to.
“The day’s intraday action is kind of a microcosm of what we’ve felt as investors over the last few weeks,” said Keith Buchanan, portfolio manager at GLOBALT Investments. “The optimism is based almost entirely on a pessimistic outlook. The optimism of the Federal Reserve pivot only occurs in a scenario where things are deteriorating more rapidly, macroeconomically.”
“Volatility is here and it’s been here for a while, and I think it’s probably here to stay,” he added. “Not on a day-to-day, week-to-week basis, but on an intraday basis, just because of where investors are now.”
In other earnings news, shares of Harley-Davidson jumped 11.9% after the motorcycle maker reported beating expectations before the bell. Boeing lost 8.9% after the plane maker reported a quarterly loss and missed revenue expectations.
Stocks attempted a rally earlier in the day, with traders trying to shake off disappointing quarterly results from Microsoft and Alphabet. The S&P 500 earlier moved positive and the Dow rose more than 300 points.
Any major index closing in the negative would snap their respective three-day winning streak.