U.S. stocks tumbled Tuesday as investors reacted to a busy slate of tech and industrial earnings that failed to pierce concerns over Federal Reserve rate hikes and China's Covid lockdown.
The Dow Jones Industrial Average finished down 809 points, or 2.4%, to 33,240, while the S&P 500, which is down 10% for the year, fell 2.8% and the tech-heavy Nasdaq Composite falling 4% to a fresh low for 2022.
Tesla (TSLA) led the Nasdaq's retreat, falling 12.2% to $867.42. The electric vehicle maker has a factory in Shanghai, and CEO Elon Musk is buying Twitter (TWTR) in a $44 billion take-private deal.
Data showing a notable decline in U.S consumer confidence, as well as a bigger-than-expected decline in new home sales, added to the trading pressure.
Tech stocks also lead the sump with their worst day since September of 2020, ahead of March quarter updates from Microsoft (MSFT) and Google (GOOGL) after the bell and Apple (AAPL), Meta Platforms (FB) and Amazon (AMZN) later in the week.
That momentum found its way into Asia markets, which booked modest gains despite the ongoing surge in Covid infection in China that could trigger a lockdown order in Beijing and is likely to keep supply chains disrupted across a number of business sectors -- while adding to inflation pressures -- over the coming months.
"Elon Musk's acquisition of Twitter is a nice sentiment-driven and short-term distraction from the broader worries facing markets, like inflation, geopolitical concerns and a more hawkish Federal Reserve," said George Ball, chairman of Sanders Morris Harris, a Houston-based investment group with around $4.9 billion in assets under management.
"The stock market's declines are driven by higher interest rates, as investors reassess how much they're willing to pay for certain stocks," he added, noting that "while Covid-driven lockdowns in China may disrupt supply chains right now, they'll have little impact on markets over the long-term."
European stocks ended 0.9% lower in Frankfurt trading, as a solid set of blue-chip earnings and softer regional currencies failed to offset the sell-off on Wall Street, while in Asia MSCI ex-Japan index added 0.4% by the close of trading.
Stateside, benchmark 10-year note yields eased to 2.774% in New York trading while the dollar index, which tracks the greenback against a basket of six global currencies, consolidated its recent two-year highs to gain 0.6% and trade at 102.345.
General Electric fell 10.34% despite better-than-expected first quarter profits as CEO Larry Culp said 2022 earnings could likely come in at the lower end of the industrial company's prior forecast.
UPS (UPS) dropped 3.6% after it posted stronger-than-expected first quarter earnings, while re-affirming its full-year profit forecast, but cautioned the domestic volumes could continue to decline over the first half of the year.
3M (MMM) lost 3% after a mixed set of first quarter earnings that included litigation costs linked in part to a settlement in Belgium clipped the industrial group's bottom line.
PepsiCo gained 0.3% after better-than-expected first quarter earnings, as well as a lift in full-year revenue forecasts, as the group's Frito Lay snacks division continues to drive topline growth.
