STORY: U.S. stocks closed lower Wednesday as chip stocks tumbled and investors await a host of corporate earnings.
The Dow slipped marginally while the S&P 500 lost about one third of one percent, and the Nasdaq fell about half of one percent.
AMD contributed to the weakness in chip stocks after its revenue forecast failed to impress investors looking for a bigger windfall from the AI boom.
Its shares sunk nearly 11%.
However, Alphabet added nearly three percent after the first of the "Magnificent Seven" megacap technology stocks to report quarterly results posted strong results.
After the close, Fellow 'Mag 7' members Microsoft and Meta Platforms released results showing they both beat quarterly revenue estimates.
Despite the promising results from the tech giants so far, Girard Chief Investment Officer Tim Chubb calls this earnings season overall lukewarm and thinks stocks are looking pricey.
"Right now, Equities are expensive. We have priced in a lot of, you know, really positive news for next year. You look at some of the earnings growth estimates for 2025 and they're in the low to mid teen range. And so much of that is being predicated on just the spending that we've seen and how concentrated we've seen the spending within the magnificent 7 companies as these hyperscalers have been, building out their AI capabilities
And so, you know, looking under the surface, there are very few sectors, companies that are really experiencing an environment where owners are growing, top line is moving in the right direction."
In economic data, the U.S. gross domestic product increased at a 2.8% annualized rate, according to the Commerce Department's advance estimate of third-quarter GDP.
That was slightly below economists' forecast of 3% growth.
A separate report showed U.S. private payrolls grew more than expected in October.