Global shares tumble after a wipeout on Wall Street as Big Tech retreats

Wall Street leaned toward losses before the opening bell Thursday as more earnings poured in while investors waited for the latest data on how the U.S. economy fared in the second quarter.

Futures for the S&P 500 fell 0.2% before the bell, while futures for the Dow Jones Industrial Average were close to unchanged. The tech-heavy Nasdaq was down 0.3%.

Southwest Airlines and American Airlines tumbled early after reporting a steep drop in second-quarter profit despite higher revenue.

Southwest also said it was doing away with its 50-year-old practice of open seating. The airline said it would start assigning seats and selling premium seating for customers who want more legroom.

The new strategy could also generate revenue and boost financial performance, but investors seemed more focused on Southwest’s second-quarter profit, which fell 46% from a year earlier as higher costs for labor, fuel and other expenses outstripped an increase in revenue.

Ford Motor Co. fell more than 13% in premarket Thursday after it reported late Wednesday that second-quarter net income fell 4.7% as its combustion-engine unit posted a pretax loss because of rising warranty and recall costs.

Warner Bros. Discovery was reeling from the NBA’s rejection of its $1.8 billion per year offer to continue its longtime relationship with the league. The NBA said it was taking Amazon’s streaming deal instead, a move that would mean this coming season would end a nearly four-decade run of games being on TNT. Warner Bros. Discovery fell 4.6% in off-hours trading following Wednesday’s announcement.

Hasbro jumped 9.4% after the toy and game maker posted strong financial results that easily surpassed Wall Street expectations.

Later Thursday, the government issues its first estimate of how the U.S. economy performed in the second quarter. The nation’s economy slowed sharply in the first quarter to a 1.4% annual pace, the slowest quarterly growth since spring of 2022, a sign that high interest rates may be taking a toll on the economy.

Global shares retreated on Thursday, with Tokyo’s benchmark losing more than 1,300 points at one point and closing down more than 3%, as pessimism set in over a nose-dive on Wall Street.

In Asia, Japan’s benchmark Nikkei 225 lost 3.3% to 37,869.51, its lowest close since April.

The recently strengthening yen, which has recovered from trading above 160 Japanese yen to the dollar earlier this month, hurts profits of Japanese exporters when they are brought back to Japan. Toyota Motor Corp. shares dropped 2.6%, while Sony Group’s sank 5.4%.

In currency trading, the U.S. dollar edged down to 152.65 yen from 153.89 yen. The euro cost $1.0848, up from $1.0841.

The yen has been gaining against the dollar largely because of speculation the Bank of Japan will raise its near-zero benchmark interest rate soon. The central bank’s next policy meeting ends on July 31.

“The major risk is that the BOJ might refuse to hike next week, causing the entire long yen trade to collapse. But that’s probably just a bad thought,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

Chinese shares fell as investors questioned a central bank decision to cut another key interest rate after several similar moves earlier this week.

Hong Kong’s Hang Seng declined 1.7% to 17,021.91, while the Shanghai Composite fell 0.5% to 2,886.74.

South Korea’s Kospi declined 1.7% to 2,710.65 after the government reported the economy contracted at a 0.2% rate in the last quarter.

Among the region’s technology shares, Samsung Electronics fell nearly 2%, while Nintendo lost 2.4%. Tokyo Electron tumbled nearly 5%.

Australia’s S&P/ASX 200 shed 1.3% to 7,861.20.

In Europe at midday, France’s CAC 40 slid nearly 2% in early trading. Germany’s DAX fell 1.2%, while Britain’s FTSE 100 shed 0.7%.

In energy trading, benchmark U.S. crude lost $1.26 to $76.33 a barrel. Brent crude, the international standard, fell $1.25 to $79.57 a barrel.

Wednesday on Wall Street, the S&P 500 tumbled 2.3% for its fifth drop in the last six days, closing at 5,427.13. The Dow Jones Industrial Average dropped 1.2% to 39,853.87, and the Nasdaq composite skidded 3.6% to 17,342.41.

U.S. stock indexes suffered their worst losses since 2022 after profit reports from Tesla and Alphabet helped suck momentum from Wall Street’s frenzy around artificial-intelligence technology.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : ABC News – https://abcnews.go.com/Business/wireStory/stock-market-today-global-shares-tumble-after-wipeout-112260101