Stocks fall for the first day in four after Big Tech earnings disappoint; Nasdaq slides more

Stocks slid Wednesday after a disappointing first round of technology earnings made investors more cautious looking toward the second half of the week.

The tech-heavy Nasdaq and S&P 500 were down 1.8% and 0.7%, respectively. The Dow Jones Industrial Average hovered around the flatline, as Visa shares gave the index a small boost on strong quarterly numbers.

Shares of Google-parent Alphabet dropped 8.5% after the tech giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, which spurred investors to deliberate the outlook for other tech companies that rely on ad spending.

Meanwhile, Microsoft declined about 7.6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite beating earnings and revenue estimates. The company also issued current-quarter revenue guidance that fell short of expectations.

“I think we have to take a big picture perspective and recognize that no one’s really immune in this market, there is a slowdown in digital ad spend,” Sand Hill Global Advisors’ Brenda Vingiello said Tuesday on CNBC’s “Closing Bell: Overtime.”

In other earnings news, Harley-Davidson shares rose 6.7% after the motorcycle maker reported beating expectations before the bell. Meta was among the companies also set to report.

Wednesday’s early performance is a turn from the past three days of the major indexes rising. On Tuesday, the Nasdaq ended up 2.2%, while the S&P 500 and Dow added 1.6% and 1.1% higher, respectively. Tuesday’s close marked the first time in October the major indexes rallied three days in a row.

Traders are also watching for the latest economic data on new home sales.