Following disappointing earnings reports from Tesla and Alphabet, the US tech giants suffered severe losses on Wednesday. All four major US indices plummeted, with market sentiment potentially impacting Bitcoin, which briefly fell below $64,000. Additionally, recent efforts by Mt. Gox to compensate creditors with 10,216 bitcoins further fueled concerns over selling pressures.
In the first half of this year, the AI boom drove US stocks to new highs, but investor concerns over tech stock declines have escalated recently. Yesterday, dubbed “Black Wednesday,” witnessed a collective downturn among the seven tech giants, with the Nasdaq plunging over 3%, marking its largest single-day drop since late 2022.
Among the tech giants, Tesla tumbled 12.33%, its largest daily decline since September 2020, while Nvidia fell 6.8%, Meta dropped 5.61%, and Alphabet and Microsoft fell 5% and 3.6%, respectively. Amazon and Apple also experienced declines of 2.99% and 2.88%.
The four major US indices all saw significant drops:
– Nasdaq Composite fell 654.94 points, or 3.6%, to 17,342.41.
– S&P 500 dropped 128.61 points, or 2.3%, to 5,427.13.
– Dow Jones Industrial Average decreased by 504.22 points, or 1.25%, to 39,853.87.
– Philadelphia Semiconductor Index plummeted 292.24 points, or 5.41%, to 5,105.65.
Amidst the market downturn, the VIX panic index surged 22.55% to 18.04, hitting a new three-month high. Joe Tigay, portfolio manager at Rational Equity Armor Fund, attributed the market plunge to disappointing earnings from Tesla and Alphabet. Tesla’s Q2 earnings report, despite achieving a record $25.5 billion in quarterly revenue, showed consecutive declines in electric vehicle sales and profit margins sinking to a five-year low, raising concerns about Tesla’s profitability.
Meanwhile, Alphabet reported a 14% year-over-year revenue increase to $84.7 billion in the last quarter, with net profit rising 28% to $23.6 billion, though YouTube ad revenue grew only 13% to $8.7 billion, below analysts’ expectations. Concerns were also raised about profitability due to equipment depreciation and AI spending pressures mentioned by company executives.
Sanjeev Rana, analyst at CLSA Securities Korea, noted that the US earnings season has just begun, with Apple, Microsoft, Amazon, and Meta set to report next week. Poor performances from these tech giants could further drive market declines.
Notably, against the backdrop of the US market downturn, Bitcoin also fell below $64,000 today, dropping over 3% in a single day to a low of $63,771, its lowest since July 19.
The decline in Bitcoin can be attributed not only to the tech stock plunge but also to increased selling pressure stemming from Mt. Gox’s ongoing creditor repayments. Mt. Gox’s trustee recently distributed bitcoins and Bitcoin Cash to some creditors via designated cryptocurrency exchanges, with over 17,000 creditors compensated so far.
For other creditors, Mt. Gox’s trustee will verify the validity of registered accounts and conduct further verification of designated cryptocurrency transactions, which may take some time.
On July 23 and 24, approximately 10,216 bitcoins were transferred to Bitstamp from Mt. Gox addresses, prompting concerns about additional selling pressure in the market.
As of July 24, 61,558.9 bitcoins have been transferred to exchanges for distribution, with 51,342.8 bitcoins distributed to creditors through Bitbank, SBI VC Trade, and Kraken, leaving approximately 80,126 bitcoins yet to be transferred to these exchanges.