The Dow Jones Industrial Average and S&P 500 dipped after investors picked up a record 32.9% GDP drop in the second quarter.
With Singapore entering a recession this month, it looks like the U.S. might encounter the same fate.
The U.S. economy witnessed its largest quarterly plunge in history as its gross domestic product (GDP) from April to June has massively dropped. Chief economist Mark Zandi at Moody’s Analytics told CNBC:
“The report just highlights how deep and dark the hole is that the economy cratered into in Q2 […] It’s a very deep and dark hole and we’re coming out of it, but it’ going to take a long time to get out.”
However, the 225 point drop from the Dow Jones may soon be erased as stock futures try to bounce back.
Major tech stocks in the Nasdaq Composite have outperformed on positive earnings reports despite tons of controversies going on with these giants.
The big four tech CEOs gets grilled in Congress
Facebook, Amazon, Apple, and Google CEOs were scheduled for a Congress hearing this week. However, as per Business Insider and CNN, it looks like most of the CEOs got roasted during the Congress hearing.
Starting off with Facebook’s Mark Zuckerberg, Rep. Pramila Jayapal has slammed him for copying its competitors such as Snapchat and Instagram.
In fact, The Verge uncovered controversial emails that plan to buy Instagram because he viewed them as a threat.
As for Google’s Sundar Pichai, he got grilled for their involvement in the previous 2016 U.S. elections with Hillary Clinton’s campaign.
For Apple CEO Tim Cook, Rep. Hank Johnson questioned Apple’s control over the App Store giving the developers limited legroom due to unjust terms and inequality among the competition.
Amazon CEO Jeff Bezos was also put on the spot by Congressman Lucy McBath as she played an emotional anecdote from a small business owner in which Bezos did not properly respond.
Let’s not forget that Amazon also took down a COVID-19 book after being called out by Elon Musk last June. In addition, he was also flamed for letting Amazon employees use data about independent sellers to develop competing products, uncovered by the Wall Street Journal.
U.S. tech giants on good earnings after the closing bell
Surprisingly, despite the flak that the CEOs are getting from Congress, it looks like their stock prices were not affected negatively since all of them reported positive earnings reports.
Both Facebook and Apple reported an 11% increase in their quarterly revenue. Google also recorded a first revenue decline in history. Amazon also traded 5.3% higher over rising sales during the coronavirus pandemic.
As per CNBC, the big four companies cover about 34.5% of the Nasdaq 100 and these companies added approximately US$200 billion [AU$277 billion] in total to their market values.
With Tencent overtaking Facebook in terms of market value, it seems like Facebook may catch up with the Chinese gaming and social media tech giant.
Investors shall see if the Dow Jones and the rest of the U.S. markets would close strong to end the month amid the chaos.