S&P 500, Nasdaq fall as tech retreats

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S&P 500, Nasdaq fall as tech retreats

Traders work on the floor of the New York Stock Exchange (NYSE) on the first trading day of 2024 on Jan. 2, 2024 in New York City.

Spencer Platt | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Big Tech earningsThe

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and the

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on Tuesday as tech weighed on the two stock indexes and investors awaited quarterly earnings from megacaps

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,

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and

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later this week. The broad market index retreated 0.5%, while the Nasdaq Composite tumbled 1.28%. The

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, with less exposure to tech, gained 0.5%.

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pulled back 7% and

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fell 0.9% during the normal session before reporting earnings after the bell.

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yields slipped while

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climbed ahead of this week’s Fed meeting.

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U.S. oil prices fell amid concerns about China’s economy.

Cloudy for

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lost as much as 7% in

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as results from its cloud business disappointed the Street. Cloud revenue grew 29%, but fell short of consensus for the first time since 2022. Still,

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beat estimates as

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15% from a year ago to $64.73 billion and net income rose to $22.04 billion.

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told staff it will pay a

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of up to 25% of annual bonus to rank-and-file employees.

Starbucks miss

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‘ quarterly

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to $9.11 billion, missing forecasts as same-store sales declined for the second straight quarter. Net income fell to $1.05 billion from $1.14 billion a year ago, though it met analysts’ expectations. The coffee chain’s same-store sales dropped 2% in the U.S. and a steeper 14% in China, its second-largest market, where both customer traffic and average order value decreased amid intense local competition. Starbucks shares rose as much as 5% in extended trading.

Oil’s China fearsFears of a slowing ******** economy drove

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to their

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. “******** economic turmoil, including sluggish growth and falling crude oil imports, is still a major driving force for our market,” Tamas Varga, analyst at oil broker PVM, wrote in a Tuesday note. The

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September contract fell 1.42% to $74.73 per barrel, while the

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September contract declined 1.44% to $78.63 per barrel. 

[PRO] Big rally aheadFundstrat head of research Tom Lee, who has made a

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in recent months, recommends investors

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ahead of the Federal Reserve’s interest rate policy announcement on Wednesday.

The bottom line

Starbucks’ plummeting same-store sales in China are just the latest symptom of weakness in the world’s second-largest economy.

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, which also reported quarterly results on Tuesday, said

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as market conditions remain subdued.

The challenges facing Western companies in China extend beyond sluggish consumer spending. The

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like Temu and Shein poses a serious threat to retailers such as

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and

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as they gain traction in the U.S. market.

Nvidia’s dominance in the high-end chips used to train and deploy AI systems may be weakening, judging by Advanced Micro Device’s latest results and news that Apple had trained its AI models on

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-designed chips.

AMD

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, and said sales in its data center segment, which includes AI chips, soared 115% on year to $2.8 billion during the quarter.

“We now expect data center GPU revenue to exceed $4.5 billion in 2024, up from the $4 billion we guided in April,” CEO Lisa Su said on a call with analysts.

Apple said on Monday that the

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, a sign that Big Tech companies are looking for alternatives to Nvidia.

— CNBC’s Annie Palmer, Amelia Lucas and Kif Leswing contributed to this report.

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#Nasdaq #fall #tech #retreats

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