US stocks fell Thursday afternoon under the pressure of disappointing third-quarter results from Big Tech companies and high Treasury yields.
The Dow fell nearly 200 points, or 0.6%, and the S&P dropped 1.2%. The tech-heavy Nasdaq Composite, meanwhile, sank another 2%.
The S&P 500 and Nasdaq are now both in correction territory, down more than 10% since their most recent highs in July.
Thursday’s drop comes after the S&P 500 fell to its lowest levels since May on Wednesday and the Nasdaq notched its worst day since February, closing down 2.4%.
Shares of Meta slid about 4.9% on Thursday after the Facebook parent company reported that advertising revenue had been soft this quarter. While Meta beat expectations and posted year-over-year quarterly revenue gains of 23%, Wall Street worried about its Reality Labs division, which lost $3.7 billion.
Shares of Google-parent Alphabet also slid on Wednesday, falling by 9.5% after the company reported an earnings beat on Tuesday but fell short in its cloud business. It’s the largest decline for the stock since March 2020. Shares fell another 2.8% on Thursday morning.
Shares of other big tech companies fell alongside Meta and Alphabet. Apple fell by 2.8%. Amazon, which reports Thursday afternoon, was down 2.1%.
Microsoft shares also fell on Thursday by 3.8%. Microsoft posted revenue of $56.5 billion on Tuesday, representing 13% year-over-year sales growth, also beating expectations. Microsoft’s quarterly profits hit $22.3 billion, up 27% from the year-ago period.
The top tech companies in the US — Apple, Amazon, Nvidia, Microsoft and Alphabet — combine to make up a quarter of the S&P 500’s value, giving them an outsized impact on investors’ portfolios.
Tech stocks have also felt the impact of rising Treasury yields. The 10-year yield hovered near a key 5% threshold on Thursday morning before retreating to 4.89% in the afternoon as investors digested a report that shows the US economy expanded at a remarkably strong pace in the third quarter, despite interest rates at their highest level in 22 years.
Gross domestic product, a measure of all goods and services produced in the economy, grew at an annualized 4.9% rate in the third quarter, the Commerce Department reported Thursday. GDP is adjusted for inflation and seasonal swings.
That’s well above the second quarter’s 2.1% pace and faster than economists’ expectations of a 4.3% rate.
This story is developing and will be updated.
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