U.S. Stocks Decline as Netflix Misses Expectations; Gold Prices Drop

U.S. stocks experienced a notable decline on Wednesday, with the S&P 500 dropping by 1% as Wall Street’s upward momentum reversed. The index is poised for one of its most challenging days in recent months, although it remains near its all-time high achieved earlier this month. The Dow Jones Industrial Average fell by 417 points, or 0.9%, from its record set just a day prior, while the Nasdaq composite declined by 1.7% as of 14:20 Eastern Time.

The downturn was significantly influenced by Netflix, which reported lower-than-expected profits for the latest quarter. This disappointment raised concerns about the video streaming giant, as well as the broader market’s ability to sustain robust profit growth. Investors had previously criticized high stock valuations following a remarkable 35% surge in the S&P 500 since April. Despite entering the day with a staggering 39.3% gain for the year, Netflix’s stock plummeted by 9.9% on Wednesday.

Other companies also faced challenges. AT&T saw its stock price decrease by 2.4% after reporting profits that only met analysts’ expectations. Texas Instruments faced a more significant setback, with shares falling by 8% due to profits that fell short of forecasts.

Mixed Results Across Wall Street

Despite the overall decline, some companies reported better-than-expected earnings. Intuitive Surgical, known for its robotic-assisted surgical systems, surged by 13.6% after exceeding profit predictions. Similarly, Boston Scientific climbed 4.3% following a positive earnings report. Capital One Financial and Western Alliance Bancorp also saw gains of 2% and 2.7% respectively, buoyed by their impressive profit updates. The report from Western Alliance was particularly reassuring after the bank had previously raised concerns about potential bad loans.

In a more volatile segment of the market, Beyond Meat exhibited extreme fluctuations, initially doubling in value before erasing those gains. By the end of the day, the stock had rebounded to a gain of 8.5%, marking an astonishing increase of nearly 509% for the week. This surge was partly attributed to Walmart’s announcement of expanded availability for some of Beyond Meat’s products in over 2,000 stores across the U.S.

Gold Prices Retreat Amid Market Shifts

Gold prices also faced downward pressure, falling by 1.1% to $4,065.40 per ounce after a significant 5.3% decline the previous day. Although many underlying factors, such as expectations for interest rate cuts from the Federal Reserve and ongoing inflation concerns, continue to support gold as a safe-haven asset, market sentiment has shifted. Critics have pointed out that gold’s price had surged too rapidly, outpacing the gains seen in the U.S. stock market. Nonetheless, gold is still up approximately 55% for the year.

Globally, stock markets presented a mixed picture. In Europe, London’s FTSE 100 rose by 0.9%, buoyed by a report on U.K. inflation that hinted at a possible interest rate cut next month. South Korea’s Kospi increased by 1.6%, reflecting stronger regional performance. Conversely, markets in Hong Kong and Paris fell by 0.9% and 0.6% respectively.

In the bond market, the yield on the 10-year Treasury eased slightly to 3.95% from 3.98% late the previous day.

As the market navigates these fluctuations, investors remain vigilant about upcoming earnings reports and economic indicators that may influence future trends.