By Christine Idzelis and William Watts
U.S. stock benchmarks ended sharply lower Tuesday, with the Nasdaq Composite booking its lowest close since 2020, as investors sifted through a raft of company results and awaited earnings reports that came after the bell from tech giants, including Microsoft Corp. and Google parent Alphabet Inc.
How did stock indexes perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.05% dropped 809.28 points, or 2.4%, to close at 33,240.18.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.02% fell 120.92 points, or 2.8%, to finish at 4,175.20.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.34% shed 514.11 points, or 4%, to end at 12,490.74, booking its largest daily percentage drop since Sept. 8, 2020 and its lowest close since Dec. 14, 2020, according to Dow Jones Market Data.
Monday saw the biggest intraday reversal since February for the Dow, which rose 238 points, or 0.7%, erasing a loss of nearly 500 points. The S&P 500 rose 0.6%, and the Nasdaq Composite gained 1.3%.
What drove markets?
Stocks sank Tuesday, with all three major benchmarks falling after Monday’s rally.
“Investors are not necessarily secure” in the strength of the market, with “fragility” on display since the beginning of the year, said Aoifinn Devitt, chief investment officer at Moneta, in a phone interview Tuesday. “There is this fear of slowing growth.”
The CBOE Volatility Index /zigman2/quotes/210598281/delayed VIX +0.95% jumped to around 33 on Tuesday, according to FactSet data. That compares with a 200-day moving average of around 21.
Consumer discretionary /zigman2/quotes/210600228/delayed XX:SP500.25 -0.67% , information technology /zigman2/quotes/210600213/delayed XX:SP500.45 -0.21% and communication services /zigman2/quotes/210600403/delayed XX:SP500.50 -0.97% were the hardest hit sectors of the S&P 500 on Tuesday, according to FactSet data. Tech and communications services had posted the strongest performance for the S&P 500 in Monday’s stock market rally .
“Now we have this giveback today,” said Devitt. “Markets are trying to figure out a level.”
The S&P 500 ended Tuesday slightly above its closing low this year of 4,170.70 on March 8, according to Dow Jones Market Data. The tech-laden Nasdaq Composite saw its lowest close since Dec. 14, 2020.
Stocks fell as investors waded further into the busiest week of the U.S. company-earnings reporting season, digesting results from a number of corporate heavyweights released before the opening bell. They were also looking ahead to results from megacap tech companies Microsoft Corp. /zigman2/quotes/207732364/composite MSFT -0.80% and Google parent Alphabet Inc. /zigman2/quotes/205453964/composite GOOG -1.09% , which reported after the closing bell.
Tech giants are “big movers in the market,” said Paul Nolte, a portfolio manager at Kingsview Investment Management, by phone Tuesday. Both the S&P 500 and Nasdaq are “dramatically impacted by tech.”
Jitters around tech were amplified by the performance of formerly high-flying Netflix /zigman2/quotes/202353025/composite NFLX -1.63% shares, which have dropped more than 40% since announcing last week that it had lost 200,000 subscribers in the first quarter.
While around 80% of companies so far reporting earnings for the quarter have beaten profit expectations, including General Electric Co., United Parcel Service Inc. and Pepsico Inc., disappointing earnings forecasts are weighing on shares.