Wall Street tumbles on poor tech results from Tesla

Some investors are now moving their money away from Big Tech

(Image credit: Stan Honda / AFP via Getty Images)

published July 25, 2024

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.

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.

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Arion McNicoll is a freelance writer at The Week Digital and was previously the UK website’s editor. He has also held senior editorial roles at CNN, The Times and The Sunday Times. Along with his writing work, he co-hosts “Today in History with The Retrospectors”, Rethink Audio’s flagship daily podcast, and is a regular panellist (and occasional stand-in host) on “The Week Unwrapped”. He is also a judge for The Publisher Podcast Awards.