Nasdaq Sheds 444 Points, Dow Drops 550 as Tech Earnings Disappoint and Oil Surges Past $100

Mumbai, July 23: US stock markets opened sharply lower on Thursday, with the technology-heavy Nasdaq Composite leading the retreat as disappointing earnings from Alphabet and Tesla spooked investors, while a spike in crude oil above the $100 per barrel mark on escalating Middle East hostilities added to broad-based selling pressure. The Nasdaq Composite fell 444.01 points, or 1.73%, to 25,246.89 within the first hour of trading, while the Dow Jones Industrial Average dropped 550.58 points, or 1.05%, to 51,668.00, and the S&P 500 declined 76.22 points, or 1.02%, to 7,422.74 as of 9:57 AM EDT. The tech-heavy Nasdaq opened at 25,245.54, traded in a range of 25,212.99 to 25,358.28, and recorded a volume of 1.3 billion shares within the first hour, well below its three-month average volume of 9.68 billion. 

Alphabet Tumbles 6% After $205 Billion Capex Plan Triggers AI Spending Fears 

Alphabet Inc. (GOOGL) emerged as the biggest drag on the Nasdaq after its Class A and Class C shares fell more than 6%, despite reporting robust second-quarter results. Revenue growth was driven by Google Cloud, which surged 82% year-over-year to nearly $25 billion, while operating margin expanded to 36%. YouTube Ads revenue increased 13% to $11.06 billion, supported by strong engagement, with CEO Sundar Pichai highlighting that 1.7 billion unique viewers watched World Cup content. The company also booked $98 billion in additional income, largely from unrealised gains in investments such as SpaceX and Anthropic. However, investors focused on Alphabet’s decision to raise its 2026 capital expenditure guidance to $195-205 billion, significantly above expectations, pushing quarterly free cash flow into negative territory for the first time. Concerns over rising AI infrastructure spending,higher planned capex in 2027, and a €890 million EU antitrust fine further weighed on investor confidence. 

Tesla Crashes 12.5% as Earnings Miss and Massive Capex Year Weigh on EV Maker 

Tesla Inc. (TSLA) was among the session’s worst performers, with shares plunging 12.48% after the company reported weaker-than-expected second-quarter earnings. Adjusted earnings per share of $0.15 missed analyst estimates despite record quarterly revenue of $16.74 billion, as operating expenses outpaced revenue growth and compressed margins. CEO Elon Musk described 2026 as a “massive capex year,” highlighting significant investments in Optimus robots, robotaxis, and data centres, while expressing confidence in future returns. However, investors remained concerned over rising spending after Tesla reported negative free cash flow for the first time in years. The sharp selloff pushed the stock to a three-month low, wiping out more than $150 billion in market capitalisation at the opening bell. 

Brent Crude Breaches $100 as Houthi Tanker Attacks Widen Middle East Conflict 

Oil prices surged after escalating Middle East tensions, adding pressure to global equity markets. Brent crude climbed 6.81% to $100.48 per barrel, its first move above $100 since late May, while US West Texas Intermediate (WTI) crude rose 5% to above $91 per barrel. The rally followed reports that Yemen’s Iran-backed Houthi group attacked two Saudi oil tankers in the Red Sea, raising concerns over global energy supplies. The conflict intensified further after US President Donald Trump issued fresh warnings to Iran, fuelling fears of a broader regional conflict. Rising oil prices reignited inflation concerns, driving US Treasury yields higher as investors reassessed the outlook for Federal Reserve interest rate policy. 

Dow Slumps 550 Points as Defensives and Cyclicals Both Suffer Across All Sectors 

The Dow Jones Industrial Average shed 550.58 points, or 1.05%, to open at 51,668.00, with the index trading in a range of 51,557.68 to 51,885.14 within the first hour. The volume on the Dow stood at 75.18 million shares, significantly below its three-month average volume of 536.45 million, indicating cautious participation. All 30 components traded lower except for a handful of energy and defence names. Honeywell International (HON) was a rare bright spot, climbing 6.24% after its earnings beat, while Chevron (CVX) rose 1.89% and Caterpillar (CAT) gained 1.25% on the back of rising oil prices and defence spending optimism. 

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However, the losses were broad-based, with Walt Disney (DIS) down 2.13%, American Express (AXP) off 2.41%, and Goldman Sachs (GS) sliding 2.07%. The weakness in technology and consumer discretionary stocks weighed heavily, reflecting the market’s rotation away from growth names amid rising yields and geopolitical uncertainty. The Dow Jones Industrial Average heatmap showed significant declines across technology, consumer cyclical, and financial services sectors, with only energy and industrials showing some resilience. The VIX volatility index, often referred to as Wall Street’s fear gauge, jumped more than 15% to levels not seen since the Iran war escalation began. 

S&P 500 Drops 1% as Broad-Based Selloff Hits All 11 Sectors 

The S&P 500 declined 76.22 points, or 1.02%, to open at 7,422.74, trading in a range of 7,408.24 to 7,450.12 with a volume of 404.42 million shares within the first hour. The benchmark index’s heatmap revealed weakness across all 11 sectors, with technology and communication services leading the declines. Alphabet’s 6.05% drop and Tesla’s 12.48% plunge were the primary drivers, but losses were widespread. Meta Platforms (META) fell 2.74%, Amazon (AMZN) dropped 3.66%, and T-Mobile US (TMUS) slid 5.82% ahead of its earnings report later in the day. 

The energy sector was a notable outlier, with Chevron (CVX) gaining 1.89%, Exxon Mobil (XOM) rising 1.52%, and ConocoPhillips (COP) trading higher as oil prices surged. Defence contractors also outperformed, with RTX Corporation (RTX) jumping 8.71% and Lockheed Martin (LMT) gaining 11.58% after their earnings beat. However, these gains were insufficient to offset the broader declines, with the S&P 500’s equal-weight version (RSP) also falling, indicating that the selloff was not merely a function of mega-cap concentration. 

Nasdaq 100 Heatmap Shows Broad Tech Weakness Amid Mixed Semiconductor Performance 

The Nasdaq 100 index, which tracks the largest non-financial companies on the exchange, reflected the broader selloff with a 1.52% decline to 28,558.40. The heatmap data revealed significant divergence within the technology sector, with chipmakers showing a mixed performance. Micron Technology (MU) gained 2.88% on the back of Elon Musk’s mention of increased memory chip demand, while Applied Materials (AMAT) rose 1.92% and Lam Research (LRCX) advanced 0.54%. Seagate Technology (STX) climbed 2.55% and Western Digital (WDC) rose 1.55%, benefiting from the memory chip optimism. 

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However, Texas Instruments (TXN) tumbled 2.79% despite beating earnings estimates, reflecting profit-taking after a strong run, while Palo Alto Networks (PANW) slid 2.60% and Adobe (ADBE) fell 0.22%. Shopify (SHOP) dropped 2.98%, Analog Devices (ADI) fell 1.81%, and Qualcomm (QCOM) declined 1.78%. The semiconductor sector’s mixed performance underscored the ongoing rotation within tech, as investors weighed AI-driven demand against rising capital expenditure concerns and margin pressures across the supply chain. The broader technology sector, as represented by the Nasdaq 100, showed that more than 70% of its constituents were trading lower, with only a handful of semiconductor and industrial names bucking the trend. 

Jobless Claims Drop to 187,000, Lowest Since 1969, Fueling Rate Hike Bets 

US initial jobless claims fell to 187,000 for the week ended July 18, the lowest level since 1969 and well below expectations of 210,000, signalling continued labour market strength. The stronger-than-expected data, alongside surging oil prices and rising Treasury yields, reinforced expectations that the Federal Reserve could tighten monetary policy further. According to CME FedWatch, the probability of a rate hike at next week’s meeting rose to 35% from 11% a week earlier, while expectations for a September hike also increased significantly. 

Top Gainers and Losers: Defence Stocks Rally While Airlines and EV Names Plummet 

Defence stocks led the market higher as escalating geopolitical tensions boosted demand for the sector. Lockheed Martin surged 11.58% after reporting stronger-than-expected second-quarter earnings and raising its full-year guidance, supported by broad-based sales growth.  

RTX Corporation advanced 8.54%, while Honeywell International gained 6.24%. Thermo Fisher Scientific climbed 9.61% on strong life sciences demand, and United Rentals rose 12.52% following an earnings beat. Other notable gainers included NovoCure, Cleveland-Cliffs, Medpace Holdings, Oceaneering International, and IMAX. On the losing side, Tesla plunged 12.48%, while Albertsons, STMicroelectronics, Rollins, Mobileye, Molina Healthcare, and American Airlines also declined sharply after disappointing earnings, weaker guidance, or rising cost pressures, with higher fuel prices weighing particularly on airline stocks. 

Nasdaq Inc Rises 2% on Strong Earnings Despite Broader Market Weakness 

Nasdaq Inc. (NDAQ) outperformed the broader market, rising nearly 1% after reporting stronger-than-expected second-quarter 2026 results. Adjusted earnings per share of $1.07 comfortably exceeded analyst estimates, while net revenue climbed 15% year-over-year to $1.5 billion. Growth was driven by solid performance across its businesses, with Capital Access Platforms revenue rising 19% to $621 million and Financial Technology revenue increasing 16% to $539 million. The standout performer was the Index business, where revenue surged 38% to $271 million, supported by higher assets under management in Nasdaq-branded exchange-traded products and the inclusion of SpaceX in the Nasdaq-100 Index. The company also declared a quarterly dividend of $0.31 per share, reinforcing investor confidence despite bro 

SpaceX Stock Hits Record Low as Short Interest Surges to 32% of Float 

In a related development, shares of SpaceX (SPCX) tumbled 6.7% to close at $115.26 on Wednesday, hitting a new all-time low and extending its decline from its June 16 peak of $225.64. The stock has now nearly halved in value since its debut, with short sellers reportedly betting against approximately 206 million shares, representing about 32% of the company’s public float—up sharply from 185 million shares (29%) last week and just 40 million shares (7%) a month ago.  

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The slump has cost Elon Musk his trillionaire status and has impacted retirement portfolios, as several stock index providers fast-tracked SpaceX’s entry into their indexes. The stock showed some signs of stabilisation in early pre-market trading on Thursday, but the broader weakness in Tesla and technology names continues to weigh on investor sentiment toward Musk’s ventures. Investors have reportedly shorted about 206 million shares of SpaceX, or about 32% of the company’s public float, according to estimates from S3 Partners. 

Other Key Earnings: Intel, T-Mobile, and Lockheed Martin in Focus 

Several other companies reported earnings that moved their shares in early trading. Lockheed Martin (LMT) delivered an earnings and revenue beat in its second-quarter financial report, boosting its full-year guidance slightly, with both coming above consensus expectations according to FactSet. Those rosier projections come from higher forecasts for sales across all of its segments, but in particular a jump in its aeronautics business. Comcast (CMCSA) edged lower despite reporting better-than-expected results, showing strength in its media and entertainment business, with streaming platform Peacock hitting profitability for the first time and revenue from the content and experience division rising 23% year-over-year. However, the company again reported broadband customer losses as well as declines in its Cable TV subscriber business. 

Texas Instruments (TXN) fell 2.79% despite beating earnings estimates, while International Business Machines (IBM) slid 1.79% after recently diving on weak preliminary results. ServiceNow (NOW) rose 7.2% in pre-market but gave up some gains in the opening session, while Molina Healthcare (MOH) fell 9.2% and Rollins (ROL) declined 14.7% after their earnings reports. Swimming pool supplier Leslie’s (LESL) plunged 47% on reports that it’s considering filing for a Chapter 11 bankruptcy. Intel (INTC) slipped 1.5% ahead of its report after markets close, while T-Mobile US (TMUS) fell 6% ahead of its earnings later in the day. 

The opening session’s sharp declines across major US indices reflected weak earnings, escalating geopolitical tensions, rising bond yields, and stronger-than-expected labour data. Investors reassessed AI spending expectations as oil crossed $100, raising inflation concerns. Upcoming earnings and Middle East developments will remain key drivers of market direction and sector performance.