The Nasdaq and S&P 500 fell on Wednesday as traders assessed disappointing earnings from tech giants Microsoft and Alphabet.
The Nasdaq fell 1.9%. The S&P 500 fell 0.6%. The 30-stock Dow Jones Industrial Average rose 3 points, nearly flat.
Utilities and real estate as a sector edged lower later in the day. They join the ranks of consumer discretionary, communications services and technology.
Earlier in the day, the Dow rose more than 300 points as Visa boosted the index with strong earnings. The S&P 500 was also positive.
Shares of Google parent Alphabet fell 6.4% after the tech giant missed estimates on both revenue and profit. Alphabet also reported a drop in YouTube ad revenue, prompting investors to consider the prospects of other tech companies that rely on ad spending.
Meanwhile, Microsoft shares fell about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarter, despite topping earnings and revenue estimates. The company also issued lower-than-expected revenue guidance for the current quarter.
Volatility in major stock indexes reflects a “tug-of-war” between U.S. corporates and the Federal Reserve, leaving investors trying to balance what companies report with what that means for rate hikes, said Keith Buchanan, portfolio manager at GLOBALT Investment. The first big tech report had a particular impact, he said, because it’s an industry in which many people invest.
“The day’s intraday moves are a microcosm of how we’ve been feeling as investors over the past few weeks,” said Keith Buchanan, portfolio manager at GLOBALT Investments. “Optimism is built almost entirely on pessimism. From a macroeconomic perspective, the Fed The turn of optimism only happens when things get worse faster.”
“Volatility is here, and it’s been around for a while, and I think it’s probably here to stay,” he added. “Not daily, weekly, but intraday, just because of where investors are right now.”
In other earnings news, Harley-Davidson shares rose 6.7% after the motorcycle maker reported beating expectations before the open. Boeing shares fell 9.4% after the jet maker reported a quarterly loss that missed revenue expectations.
Stocks attempted a rebound earlier in the day as traders tried to shake off disappointing quarterly results from Microsoft and Alphabet.
If the indices close in negative territory, the S&P 500 and Nasdaq will end their three-day winning streak.