Stocks Slump as Tech Giants Disappoint; Nasdaq Enters Correction Territory

Stocks dropped sharply on Wednesday, with the Nasdaq falling 2.5% amid disappointing earnings from Alphabet. The S&P 500 fell 1.5% while the Dow lost 0.3%.

Alphabet shares slid over 9% after its cloud growth slowed again in Q3. Microsoft stock rose 2% after strong cloud results attributed to AI.

Rising Treasury yields put further pressure on strained tech stocks. The 10-year yield climbed above 4.9% while the 30-year crossed 5%.

Earnings reactions have been weak overall, with companies beating estimates seeing smaller stock gains than normal. Those missing estimates are being punished more heavily.

The Nasdaq entered correction territory, defined as a 10% drop from recent highs. The index's fall was its worst single-day performance since February.