US stocks were trading in the negative territory during the pre-opening session on Wednesday due to poor earnings from major tech firms.
The Nasdaq could struggle to rebound today, with Alphabet and Tesla’s deceiving reports affecting market sentiment.
Alphabet’s stock dropped 1% after hours because of lower YouTube ad revenue, while Tesla’s stock fell over 4% due to a 45% drop in second-quarter profits and a decline in automotive revenue.
Tesla shares continued to fall in premarket trading, and Alphabet’s stock slipped over margin concerns. Despite these issues, the market has recently been trending upward, especially in sectors like small-cap stocks and industrials, due to optimism for a soft economic landing but could see some price corrections overall.
The market now focuses on IBM’s Q2 earnings, expected after the close. Sales are forecasted to rise slightly from $15.48 billion last year, but EPS is projected to drop slightly. IBM has beaten earnings expectations for the past five quarters. If IBM’s earnings exceed expectations, it could help support the technology sector and the broader market.
The market could also react to the upcoming economic data as investors continue to gauge the next steps in monetary policy. The latter could strongly affect sentiment on top of the earnings releases.
