Traders work on the floor at the New York Stock Exchange on Sept. 19, 2024.
Brendan McDermid | Reuters
Stocks slipped on Wednesday as investors digested a deluge of earnings reports and looked toward more results from megacap technology companies.
The S&P 500 slid 0.33% to 5,813.67. The Dow Jones Industrial Average lost 91.51 points, or 0.22%, to close at 42,141.54. The tech-heavy Nasdaq Composite declined 0.56% after earlier rising to a fresh record high. It closed at 18,607.93.
Alphabet kicked off a major week for megacap tech earnings. The Google parent exceeded analysts’ expectations as the company saw strong quarterly revenue growth from its cloud business. Shares jumped almost 3%.
Elsewhere, earnings results were less upbeat. Shares of chipmaker AMD slid more than 10% as its fourth-quarter revenue guidance failed to impress investors. The broader semiconductor sector fell as shares of Super Micro Computer plunged nearly 33% after the departure of the company’s auditor raised concerns about its financial statements.
Tech titans Meta Platforms and Microsoft are set to report on Wednesday, while Apple and Amazon are due Thursday.
“It looks as if technology results are still providing the encouragement to investors who are overweight on the space,” said CFRA Research chief investment strategist Sam Stovall.
On the economic front, the latest numbers pointed to a mixed backdrop.
The U.S. economy grew at a slower-than-expected rate in the third quarter, according to gross domestic product figures. GDP rose at an annualized rate of 2.8%, while economists surveyed by Dow Jones had been looking for an increase of 3.1%.
However, payrolls data on Wednesday pointed to a stronger-than-expected labor market. According to the latest ADP report for October, private-job creation jumped to its highest level in more than a year.
The major averages have risen to new record highs in recent weeks, but heightened uncertainty ahead of the U.S. presidential election on Nov. 5. could stall the market’s gains. Matt Stucky, chief portfolio manager at Northwestern Mutual, thinks the market’s reaction will be more muted compared to 2016.
“Things are uncertain, but I don’t think that this is a repeat of the volatility that we saw in 2016,” Stucky said. “In contrast, today we’re seeing results lean in a certain way but there’s still a very high likelihood that either candidate could win. With that being the case, you don’t have positioning completely offsides heading into election night.”