Stocks fall as Wall Street prepares for Fed rate decision

Retail investors have continued buying stocks over the past week, reaching a weekly high that matches levels seen in May and August, according to Vanda Research.

Marco Iachini, senior vice president, pointed to earnings as a main driver of activity, noting many of the favorite retail stocks saw sell-offs after releasing disappointing forward guidance. But Iachini said it was seen as a “buy-the-dip opportunity” as opposed to a capitulation.

Retail investors were purchasing U.S. securities at a rate of $1.5 billion per day as of Tuesday.

He also said investors typically chase momentum whenever risk rallies coming off periods of poor performance in an attempt to pare losses. He likened the action to “F.O.M.O.,” or the fear of missing out.

Iachini said retail investors will be watching the Fed meeting for comments that could indicate future plans for interest rates as well as the next consumer price index data.

— Alex Harring

Bernstein analyst Toni Sacconaghi says Tesla’s stock has a downside of 34% because its software performance is not as strong as some believe.

An analysis found the company’s software attributes about 1.3% of total company revenues. That amounts to about $290 million per quarter.

Sacconaghi is in the minority in calling Tesla an underperformer, as only 10% of analysts see it as that or a buy, according to FactSet. Meanwhile, 61% see it is a buy or overperformer and 29% a hold.

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— Alex Harring

Big Tech has had a terrible five-day stretch, with companies encompassing the group losing nearly $1 trillion in market cap, according to Goldman Sachs. That’s the biggest-ever market cap loss for the group over that time period.

The losses come after a slew earnings-driven sell-offs for companies such as Meta Platforms, Alphabet, Microsoft and Amazon.

— Fred Imbert, Michael Bloom

These are some of the companies making big moves in midday trading:

Tupperware Brands — Shares of the household storage products maker plunged 42% after a third-quarter earnings miss. The company also said it may not be able to comply with the covenants in its credit agreement, raising “substantial doubt” about its “ability to continue as a going concern,” the earnings release said.

Chegg — The education stock surged more than 22.2% after the company beat estimates on the top and bottom lines for the third quarter. Adjusted gross margin and subscribers both grew year over year.

Paramount Global — Shares of the media company dropped more than 11% after quarterly results missed expectations, as it suffered from cord-cutting and a drop in advertising revenue. Paramount said revenue for its TV media segment was down 5% compared to the previous quarter, as pay-TV subscriber numbers declined.

For more big midday movers check out our full list here.

— Tanaya Macheel

Evercore ISI called Block a tactical underperformer and said there are…