Wall St update: Nasdaq slumps 2% ahead of Big Tech earnings

The tech-heavy Nasdaq slumped more than 2% on Tuesday as nerves around Big Tech earnings this week added to worries over slowing global growth and a more hawkish Federal Reserve.

Market-leading growth stocks have been hammered this year as investors fear the impact of higher interest rates on their future earnings, while China's lockdown and hawkish pivot by major central banks have overshadowed what has been a better-than-expected earnings season so far.

Growth-oriented sectors such as technology .SPLRCT, S&P 500 communication services .SPLRCL and consumer discretionary .SPLRCD fell nearly 2%, leading losses among the 11 major S&P 500 sectors.

Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O fell 2.7% and 2.2%, respectively, ahead of their results after the closing bell on Tuesday. They are among a third of the S&P 500 companies that are set to report results this week.

"Given the picture of the market (right now), if any of these tech companies report earnings that are below expectations, it could be very dangerous because the downside is fragile," said Julius de Kempenaer, senior technical analyst at StockCharts.com.

"If they report numbers that are better than expected, I don't think that will be enough to turn the current weakness in the market around."

Although there were some earnings bright spots, the overall mood in the market was somber due to global growth fears, stoked by China's COVID-19 curbs, the Ukraine war and aggressive policy tightening by the Fed.

Russia accused NATO of creating a serious risk of nuclear war by arming Ukraine in a proxy battle as Washington and its allies met to pledge the heavy weapons Kyiv needs to achieve victory. Read full story

Twitter fell 1.8%, a day after the social media platform agreed to sell itself to Tesla Inc chief Elon Musk, while Tesla dropped 7.8%. 

At 10:16 a.m. ET, the Dow Jones Industrial Average .DJI was down 304.51 points, or 0.89%, at 33,744.95, the S&P 500 .SPX was down 59.42 points, or 1.38%, at 4,236.70, and the Nasdaq Composite .IXIC was down 318.95 points, or 2.45%, at 12,685.90.

Of the 134 companies in the S&P 500 that reported earnings so far, 80.6% topped analysts' profit expectations, according to Refinitiv data. In a typical quarter, 66% beat estimates.

United Parcel Service Inc UPS.N slipped 3.6% despite reporting a rise in quarterly adjusted profit, while U.S. hospital operator Universal Health Services Inc UHS.N slumped 11.1% after its earnings missed estimates. Read full storyRead full story

General Electric Co GE.N fell 9.8% after forecasting full-year earnings at the low end of its previous estimate. Read full story

Meanwhile, data showed U.S. consumer confidence edged lower in April, though households planned to buy automobiles and many appliances, which should help underpin consumer spending in the second quarter. Read full story

Declining issues outnumbered advancers for a 2.91-to-1 ratio on the NYSE and a 3.32-to-1 ratio on the Nasdaq.

The S&P index recorded 1 new 52-week highs and 27 new lows, while the Nasdaq recorded 17 new highs and 312 new lows.