U.S. Stocks Fall as Tech Declines and Investors Await Alphabet Results

TLDR

Table of Contents

U.S. stocks showed mixed performance as investors awaited Alphabet’s earnings results.
The Nasdaq Composite dropped over one percent while the Dow Jones gained slightly.
Private payrolls in the U.S. rose by only twenty-two thousand in January.
Tech stocks, including Alphabet, Meta, and Tesla, traded lower during the session.
AMD shares plunged despite reporting strong fourth-quarter results and guidance.

U.S. stocks traded mixed on Wednesday, as technology shares declined sharply, job data disappointed, and investors braced for Alphabet’s earnings. The Nasdaq Composite fell by over 1%, while the S&P 500 edged lower and the Dow gained. Markets responded to underwhelming private job figures and shifts in investor sentiment toward big tech.

Alphabet Earnings Loom as Tech Stocks Drop

Alphabet shares declined along with other large-cap tech names such as Tesla, Meta, and Nvidia during midday trading. Investors reduced exposure ahead of the company’s upcoming earnings release, which remains highly anticipated. Despite no major earnings warning, selling pressure increased across the tech-heavy Nasdaq index.

“Speculators have entered the market. The problem is that the construction of data centers includes very few people,” said Diane Swonk. Her comment underscored concerns that AI infrastructure growth isn’t contributing meaningfully to job creation. Alphabet’s performance will likely influence market direction into the end of the week.

While optimism remains around 2026–2027 profit expectations, immediate investor focus shifted to Q4 performance. Concerns about slower growth and earnings multiples pressured valuations across the Magnificent Seven. Meta, Nvidia, and Tesla were all trading lower in line with Alphabet’s downward movement.

U.S. stocks mixed after weak job gains

The S&P 500 dropped by 0.3%, the Nasdaq Composite fell 1.2%, and the Dow Jones Industrial Average rose 0.7%. U.S. stocks reacted quickly to January’s private payrolls data, which showed only 22,000 jobs were added, well below forecasts. ADP revised December’s numbers down as well, weakening optimism in labor market strength.

Ryan Detrick from Carson Group said, “Analysts keep raising their earnings calls for 2026 and 2027,” which he noted is boosting the S&P 500. However, the weaker labor data has cast doubts on near-term momentum. The healthcare sector led hiring, while manufacturing and other sectors shed jobs.

S&P Global’s U.S. Composite PMI rose to 53.0 in January, slightly above December’s 52.7. The PMI reading exceeded expectations, suggesting some economic resilience despite job weakness. Yet investors showed more concern about employment trends than services activity growth.

AMD, Boston Scientific, and AbbVie Lead Decliners

AMD shares fell by 16%, even though the company posted earnings and guidance that surpassed Wall Street expectations. Investors appeared to focus on valuation and future growth rates rather than immediate performance. Selling intensified during the session despite the strong Q4 results.

Boston Scientific shares declined by 15.4% after it issued a 2026 outlook that did not match investor hopes. Though Q4 earnings beat estimates, future growth projections fell short. This triggered a broad reaction in the medical technology segment.

AbbVie’s stock dropped 6.9% following its better-than-expected Q4 earnings release. The market responded negatively to guidance concerns. The pharmaceutical sector reflected broader investor caution across earnings-heavy sectors.

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