The Nasdaq Composite and S&P 500 slid Wednesday, with both indexes snapping three-day winning streaks, as traders assessed disappointing earnings from tech giants Microsoft and Alphabet.
The Nasdaq dropped 2.04%, to close at 10,970.99. The S&P 500 lost 0.74%, ending at 3,830.60. The 30-stock Dow Jones Industrial Average gained 2.37 points, roughly flat for the day and ending at 31,839.11.
Stocks attempted a rally earlier in the day, with traders attempting to shake off the quarterly results from Microsoft and Alphabet. At one point, the Dow rallied more than 300 points as Visa buoyed the index on strong earnings.
Shares of Google-parent Alphabet dropped 9.1% 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 7.7% 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.
The swings in the major indexes reflect a "tug of war" between corporate America and the Federal Reserve that has left investors attempting to balance what companies are reporting and what that means for future interest rate hikes, said Keith Buchanan, portfolio manager at GLOBALT Investments. He said the first of the big tech reports had a particular impact as it is an industry that many investors are exposed to.
"The intraday action of the day is kind of a microcosm of what we've been feeling as investors over the past several weeks," Buchanan said. "The optimism is built almost entirely on a pessimistic outlook. The optimism of the Federal Reserve pivoting only occurs in a scenario where things deteriorate more quickly, from a macroeconomic standpoint."
"The volatility is here, and it's been here for a while, and I think it's probably here to stay," he added. "Not on a day-to-day, week-to-week, but on an intraday basis, just because of the position that investors are in now."
In other earnings news, Harley-Davidson shares rose 12.6% after the motorcycle manufacturer reported beating expectations before the bell. Boeing lost about 8.8% after the jet maker reported a quarterly loss and missed revenue expectations.