U.S. stocks tumbled Monday, led by sharp losses in technology stocks as investors braced for the start of earnings season and fresh inflation data due out later this week.
The Nasdaq Composite shed more than 2% early into the session, and the S&P 500 tumbled 1.1%. The Dow Jones Industrial Average fell 120 points, or 0.4%. The moves follow an up week for stocks that saw all three benchmarks log weekly gains despite closing flat after Friday’s jobs report.
Meanwhile, the euro slid again Monday, falling closer toward parity with the U.S. dollar. The currency dropped as much as 1.3% to $1.0057, the lowest in two decades as investors considered the possibility of an energy crisis pushing Europe’s economy into a recession.
Twitter (TWTR) was in focus early Monday after Elon Musk backed out of his $44 billion bid for the social media platform late last week. Musk cited “material” breaches of multiple provisions in the agreement in his decision to terminate the deal, including Twitter’s recent decision to axe some of its recruiting team and failure to provide Musk with what he views as accurate count on “bots,” or fake accounts. Shares fell as much as 6% at the open.
“It really isn’t about the bots,” Wells Fargo Senior Equity Analyst Brian Fitzgerald told Yahoo Finance Live on Friday. “This is Team Musk articulating for a lower price.”
Meanwhile, oil prices fell Monday amid renewed COVID fears in China that stoked worries around supply. West Texas Intermediate (WTI) crude futures declined by roughly $2, or 2%, to $102.65, in early trade, reversing a 2% gain on Friday. Brent Crude Oil also dipped by roughly 1.5% to $105.38 per barrel.
Investors are in for a bevy of quarterly results this week as major companies kick off a new earnings season.
Early reporters include JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) among the big banks set to release results, as well as PepsiCo (PEP) and Delta Air Lines (DAL).
Wall Street has trimmed its second-quarter bottom-up earnings per share estimate for the S&P 500 by 1.1% between March 31 and June 30, according to recent data from FactSet.
Although the estimated 4.1% annual earnings growth rate for the benchmark index for the second quarter would mark the slowest since year-end 2020, the markdown by analysts is smaller than typically seen ahead of earnings season.
Later this week, investors will get the latest gauge on how quickly consumer prices are rising across the U.S. economy when the Bureau of Labor Statistics’ releases its Consumer Price Index (CPI) for June on Wednesday. Economists surveyed by Bloomberg expect headline inflation rose 8.8% last month, an increase that would be the highest since December 1981 and the hottest reading of this current inflation cycle.
On the move:
Twitter (TWTR) shares fell 6.1% after Elon Musk backed out of his $44 billion bid for the social media platform on Friday. Musk cited “material” breaches of multiple provisions in the agreement in his decision to terminate the deal, including Twitter’s recent decision to axe some of its recruiting team and failure to provide Musk with what he views as accurate count on “bots,” or fake accounts.
Meta Platforms (META) tumbled more than 4% following a downgrade by Needham & Company analyst Laura Martin to Underperform from Hold, recommending investors remain on the sidelines the social media giant evaluates “several structural valuation risks,” including consumer behavior shifts, competition, moat degradation, regulatory risks and Metaverse investment risks.
Uber (UBER) stock slid 3.4% following reports the ride-hailing company attempted to lobby politicians, including French President Emmanuel Macron, and defied certain laws in efforts to expand its operations globally from 2013 to 2017. The so-called “Uber Files” reported by the Guardian and France’s Le Monde is based on more than 124,000 documents leaked to the outlets revealing “ethically questionable practices” that powered the company rise under co-founder Travis Kalanick.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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