Despite a surprising growth in the U.S. economy in the second quarter, big tech stocks are on the decline, with the Nasdaq falling by 0.93% [New York Stock Exchange].

Big Tech sell-off continues following disappointing Alphabet and Tesla earnings
2nd quarter growth rate at 2.8%… Inflationary momentum slows
Expectation of interest rate cut in September due to soft landing prospects
June PCE inflation data to be released on the 26th, ‘The three major indices of the US stock market closed mixed on the 26th local time. Investors continued to sell some Big Tech stocks on this day, following the trend from the previous day, and the rotation from large-cap to small-cap stocks persisted. The US economy exceeded expectations with a strong growth rate in the 2nd quarter, raising expectations of a soft landing.’,
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, ‘On this day, the Dow Jones Industrial Average, consisting of blue-chip stocks, rose by 81.2 points (0.2%) to close at 39,935.07 on the New York Stock Exchange. The S&P 500, dominated by large-cap stocks, fell by 27.91 points (0.51%) to 5,399.22, and the tech-heavy Nasdaq index closed at 17,181.72, down 160.69 points (0.93%).’,
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, ‘Tech stocks showed weakness by revealing second-quarter earnings on the 23rd, with Alphabet, Google’s parent company, and Tesla failing to meet investors’ expectations, raising doubts about the AI rally. Alphabet fell by 2.99%. Nvidia dropped by 1.72%, while Microsoft (MS) and Meta, the parent company of Facebook, fell by 2.45% and 1.7% respectively. On the other hand, Tesla, which plummeted by 12.33% the day before, rose by 1.97%. Ford plunged by 18.36% due to underperforming results, marking the largest decline in 16 years since 2008. Despite exceeding expectations, Chevrolet was down by 1.85%.’,
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, ‘The direction of tech stocks is expected to face another inflection point based on the earnings of other Magnificent 7 companies such as Microsoft and Apple next week.’,
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, ‘Adam Sarhan, CEO of 50 Park Investments, commented, “Changes are happening on Wall Street,” stating that “AI stocks, which have been leading the uptrend, are now leading the downtrend.” He further analyzed, “You can see one sector leading in a bull market, then stopping, being corrected, and passing the baton to another sector,” likening it to a relay race.’,
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, ‘Case Runner of Truist stated, “The recent volatile market movements were expected and are likely to continue,” adding, “The basic prediction is that the long-term bull market will be maintained.” He continued, “It is likely to continue with a pattern of taking two steps forward and one step back.”‘,
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, ‘The second-quarter US economic growth rate announced in the morning exceeded expectations. According to the Bureau of Economic Analysis (BEA), the real Gross Domestic Product (GDP) increased by 2.8% on an annualized basis in the second quarter compared to the previous quarter. This figure is twice the growth rate of the first quarter (1.4%) and significantly surpasses the Wall Street Journal (WSJ) expert forecast (2.1%). Household spending, which accounts for two-thirds of the real economy, increased by 2.3% compared to the previous quarter, showing a significant recovery from the first quarter (1.5%). Both goods and services spending increased.’,
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, ‘Inflation seems to have stabilized. The core Personal Consumption Expenditures (PCE) price index, excluding food and energy, slowed from 3.7% in the first quarter to 2.9% in the second quarter. Investors are expected to closely monitor the detailed inflation trend through the release of the June PCE price index the following day.’,
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, ‘Steven Brown, an economist at Capital Economics, stated, “With the second-quarter GDP growth rate reaching 2.8%, the Federal Reserve may feel somewhat comfortable maintaining its policy at the upcoming Federal Open Market Committee (FOMC) meeting next week,” but also analyzed, “However, recent signs of easing labor market conditions and a slowdown in the inflation rate indicate a strong case for a rate cut at the September FOMC meeting.”‘,
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, ‘The initial jobless claims in the US last week fell below market expectations. According to the Department of Labor, initial jobless claims for the week of July 14-20 were recorded at 235,000, lower than both the market expectation of 237,000 and the revised figure from the previous week of 245,000. The continued claims, representing those who have been receiving unemployment benefits for at least two weeks, also fell below both the market expectation (1.86 million) and the revised figure from the previous week (1.86 million) by recording 1.85 million.’,
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, ‘The robust GDP growth in the second quarter and the easing inflation support expectations for a soft landing of the US economy and an interest rate cut in September. According to FedWatch at the Chicago Mercantile Exchange (CME), the federal funds rate futures market is currently pricing in a 100% chance that the Fed will cut interest rates by at least 0.25% at the September FOMC meeting.’,
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, ‘US government bond yields are mixed. The 10-year US Treasury yield, the global benchmark for bond yields, is moving around 4.24%, down 3 basis points (1 basis point = 0.01%) from the previous day. The 2-year US Treasury yield, which is sensitive to monetary policy, is trading at around 4.43%, up 2 basis points from the previous day.’,
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, ‘International oil prices rose following the stronger-than-expected US economy. West Texas Intermediate (WTI) crude oil rose by $0.69 (0.89%) to $78.28 per barrel, while Brent crude, the global oil price benchmark, closed at $82.37, up $0.66 (0.81%) from the previous trading day.’,
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