CNBC Daily Open: Tech stocks were battered

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Dow outperforms
U.S. stocks traded mixed Thursday. Netflix and Tesla slipped after reporting results after the bell Wednesday, weighing down the Nasdaq Composite, but the Dow Jones Industrial Average notched a ninth straight positive session. European markets closed higher, with the regional Stoxx 600 index adding 0.4%.

Elon Musk, CEO, CTO, founder
Elon Musk is CEO of Tesla and SpaceX; CTO of Twitter; founder of Neuralink, The Boring Company and now xAI. Those overlapping roles at multiple ventures worry some analysts and investors, who think Musk might grow distracted or that his various companies might end up competing with each other. 

Wheat rises
Wheat prices have been rising this week, with the most actively traded wheat contract on the Chicago Board of Trade hitting 737 cents per bushel, a three-week high. The price jump follows Russia’s withdrawal from the Black Sea Grain Initiative. Ukraine’s Agriculture Ministry said Wednesday recent Russian attacks had destroyed 60,000 tons of grain.

Turkey’s too-slow hikes
Turkey’s central bank hiked its key interest rate by 250 basis points to 17.5%. Analysts were expecting a 500-basis-point hike to combat the country’s annual inflation of 38.21% in June. “Terrible decision … Again under-delivering,” Timothy Ash, emerging markets strategist at BlueBay Asset Management, wrote. The Turkish lira fell about 50 basis points on the news.

[PRO] Tesla in neutral gear?
Tesla may have reported record revenue for its second quarter and beaten Wall Street’s expectations for both profit and revenue. But Wall Street isn’t completely cheering the electric vehicle maker because of its shrinking margins. Here’s how analysts from the biggest banks have responded to Tesla’s earnings report.

Since late May, when the frenzy around Nvidia started building, technology stocks have been pushing the Nasdaq Composite higher, while the Dow Jones Industrial Average, which comprises fewer tech stocks, has languished.

Yesterday was a reversal of that trend.

The Dow advanced 0.47%, its ninth straight day of gains and its longest winning streak since 2017. The blue-chip index was juiced by Johnson & Johnson, which popped 6% after the company posted better-than-expected second-quarter results and raised its outlook for the year. Goldman Sachs, another Dow constituent, climbed 3%.

Meanwhile, the Nasdaq slumped 2.05%, its worst day since March, putting it on pace for a negative week. The tech-heavy index was dragged down by falling shares of Netflix and Tesla. Netflix tumbled 8.4% after posting revenue that disappointing analysts, while Tesla sank 9.7% as the company’s earnings call failed to clarify delivery and production plans for the year. Other tech stocks, like Amazon and Nvidia, fell in sympathy and lost more than 3%.

The S&P 500 also slipped 0.68%.

Still, this might be a temporary aberration because of earnings reports. There’s no indication that investor excitement over artificial intelligence has simmered down — recall how Microsoft’s stock hit a record high Tuesday after the tech company announced its subscription plans for AI.

Moreover, the Dow’s up 6.3% year to date while the Nasdaq has popped 34.4% in the same period. It’d take much more than one bad day to halt the momentum of tech stocks.