Nasdaq Slides as Tesla Plunges 14.5%, Alphabet Tumbles 7.7%

U.S. stocks closed mixed on July 24 as the tech earnings season triggered sharp divergence. Tesla and Alphabet suffered heavy losses, dragging the Nasdaq notably lower; the Dow edged up, supported by financial and consumer stocks; the S&P 500 ticked down. Investors also weighed new U.S. tariff measures and Middle East tensions.

Across sectors, the EV space faced an epic sell-off with Tesla leading the market lower. Tech and AI plays saw severe divergence—Alphabet was dumped over surging AI capital expenditures, while Apple gained as an "anti-capex" AI trade. Semiconductors held relatively firm, with Nvidia, Microsoft, and Meta jointly signing an open-source AI letter that drew broad attention.

Tesla plunges 14.5% — $214.5 billion in market cap wiped out

Tesla (TSLA) cratered 14.5%, marking its largest single-day market cap loss in history at $214.5 billion, closing around $205 with the highest turnover across the entire market. The company's Q2 earnings showed adjusted EPS missed estimates, free cash flow turned negative, and capital expenditures doubled year-over-year. Tesla significantly ramped up AI-related spending on robotaxi and humanoid robot initiatives, but investors remain skeptical about the return timeline. JPMorgan and UBS subsequently cut their Tesla price targets. Meanwhile, Elon Musk's wealth evaporated by more than $80 billion in a week, dropping his net worth to $712.5 billion; shares of his SpaceX plummeted by half within five weeks of listing, with short interest ballooning to one-third of the float and cumulative profits reaching approximately $15.5 billion.

Alphabet sinks 7.7% post-earnings as AI capex stokes alarm

Alphabet (GOOGL) dropped 7.7%, breaching the key support level of $340. Despite Q2 revenue topping estimates, the company sharply raised its full-year capex forecast to $205 billion and posted its first negative free cash flow since 2004, fueling shareholder concerns over long-term profitability. Technical analysis points to $300 as the next critical psychological level; a failure to hold could test the 200-day moving average near $270. Wall Street responded coolly, arguing that heavy AI infrastructure spending is eroding the sustainability of Big Tech valuations.

Apple bucks the trend, winning multiple analyst endorsements

Apple (AAPL) edged higher, trading above all major moving averages and closing in on all-time highs. Bank of America and Morgan Stanley both forecast that Apple's Q3 results will beat Wall Street consensus, with BofA issuing a $380 target and Morgan Stanley raising its target to $364, driven by robust iPhone sales. The Alphabet sell-off over AI capex has positioned Apple as an "anti-capex" AI play—spending minimally on AI infrastructure while consistently returning value through stock buybacks. Counterpoint Research noted that Apple has become the world's second-largest foldable panel buyer, reshaping the market landscape. Apple reports Q3 earnings on July 30.

Nvidia, Microsoft, Meta rally behind open-source AI

Nvidia (NVDA) founder Jensen Huang posted his first-ever tweet on X, representing Nvidia alongside Microsoft (MSFT), Meta (META), and other tech giants in signing an open letter backing open-source AI models. The letter argues that open-source strengthens security, accelerates innovation, and safeguards national sovereignty, urging policymakers to support open development to preserve U.S. AI leadership. Meta meanwhile faces a separate headwind: surveys show 55% of users are posting less and 53% are becoming more selective, with digital fatigue and privacy concerns threatening its user-generated-content-driven ad model.

Macro backdrop: tariff escalation and Fed expectations

On the macro front, the Trump administration plans to further broaden tariffs, launching investigations into excess manufacturing capacity across 16 economies and potentially imposing tech-related duties on the EU. Despite legal challenges, recent Section 301 import duties have proven resilient, with tariffs evolving into a permanent feature of U.S. policy. Bank of America chief strategist Hartnett warned that bond markets need the Fed to act, with real yields sitting at multi-year highs. Markets currently price a 71% probability that the Fed holds rates steady next week. CFTC data showed gold speculators' net long positions rose to 123,586 contracts in the week ended July 21, while copper net longs also surged sharply.