Wall Street tumbles on poor tech results

What happened

U.S. stocks suffered their worst day in more than 18 months yesterday after lackluster results from Tesla and Google owner Alphabet fueled fears over the high valuations of large technology companies.

Who said what

Losses in both the S&P 500, which dropped 2.3%, and Nasdaq Composite, which fell 3.6%, were largely "driven by big tech stocks" including Nvidia, Microsoft, Apple and Tesla, said the Financial Times. Tech — and artificial intelligence stocks in particular — has "driven the bulk of market gains this year."

Tesla reporting a 45% drop in profits for the spring and Alphabet's fall of 5% could "feed concerns” that the broader market has become too reliant on the so-called "magnificent seven" technology stocks, said Charlie McElligott, an analyst at Nomura, to the Times.

What next?

Analysts have questioned whether the companies that have been responsible for the majority of the S&P 500's record run this year are now too expensive. Some investors are "moving their money away from Big Tech to smaller companies," said The Telegraph. Asian shares dropped in morning trading today.

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