Warner Bros. Discovery (WBD) reported second quarter earnings after the bell on Wednesday that missed expectations on both the top and bottom lines while the company took a massive $9.1 billion impairment charge related to its TV networks unit. Including an additional $2.1 billion in costs related to its merger, the company took an $11.2 billion hit in write-down and charges last quarter.

The company also reversed earlier profit trends in its streaming business despite adding nearly 4 million subscribers in the quarter, while its linear TV unit continued to deteriorate.

This marked the first earnings report for the company since Warner Bros. lost a key media rights deal with the NBA. The company filed a lawsuit against the league over what it said was the NBA's "unjustified rejection" of the company's matching rights proposal.

The stock fell about 7% in after-hours trading as investors digested the results.

Revenue came in at $9.7 billion for the quarter, missing Bloomberg consensus expectations of $10.12 billion and a 6% drop compared to the $10.36 billion seen last year.

The company reported an adjusted loss per share of $4.07 versus a loss $0.51 in the year-earlier period and below consensus estimates of $0.21 as a result of the impairment charge.

Free cash flow, which served as a bright spot in the first quarter, bucked that trend this time around. The metric dropped 43% year over year to $976 million and also missed Bloomberg consensus expectations of $1.2 billion.

The company's direct-to-consumer (DTC) streaming business served as a bright spot in the quarter. It added 3.6 million Max subscribers amid the debut of "House of the Dragon" Season 2. This was ahead of Bloomberg consensus expectations of 1.89 million and also ahead of the 1.80 million subs added in Q2 2023.

Streaming advertising revenue jumped to $240 million, beating Bloomberg estimates of $191 million and up 98% from the $121 million the company reported in the year-ago period. The DTC division, however, posted a loss of $107 million after reporting a profit in the first quarter.

Meanwhile, network advertising revenue tumbled by 10% in Q2 from the year-earlier period. The company reported network ad revenue of $2.21 billion, missing Bloomberg expectations of $2.26 billion.

Read more about WBD's Q2 earnings report here.

Stocks whipsawed on Wednesday, failing to extend Tuesday's rebound after a brutal three-day sell-off left the S&P 500 more than 8% off its most recent high.

At one point in Wednesday's trading action, all three major averages were up over 1% before eventually declining.

This brings to mind warnings of choppy trading action from Wall Street strategists over the past several days. Truist co-chief investment officer Keith Lerner told Yahoo Finance on Monday that after massive spikes in volatility like the one seen on Monday, the market's bounce off the lows usually doesn't come in a straight line.

"We're going to be in an extended period of choppy waters," Lerner said

After a volatility spike, Lerner pointed out, the market tends to have "a cluster of strong up days and strong down days because there's a battle between fear and greed."

Lerner added the market likely needs to chop through August. Then, for trading to tilt back more bullishly, investors will likely need to see more economic data that "actually confirm the economy isn't headed into recession."

Following a July jobs report that fed recession fears, investors haven't had much fresh economic data to turn to for further signs of cooling this week.

That will change Thursday morning with the release of weekly jobless claims. While economists often note jobless claims are a volatile dataset that can swing from week to week based on things like summer storms, Citi head of US equity trading strategy Stuart Kaiser described the print as "very important" in a note to clients on Tuesday night.

Kaiser's work shows the options market is implying a 1.2% move for the S&P 500 in either direction on Thursday, putting implied volatility for the day roughly in line with the elevated levels currently expected surrounding some of August's biggest macro events, including next week's inflation report; Fed Chair Jerome Powell's speech in Jackson Hole, Wyo.; and Nvidia (NVDA) earnings.

Economists expect there were 240,000 weekly claims filed in the week ending Aug. 3, per Bloomberg Data, lowering the 249,000 seen the week prior. Given the market's recent shift to interpret good economic news as good for stocks, bullish investors will likely be looking for Thursday's reading to come in below the consensus.

As Kaiser told Yahoo Finance's Morning Brief show on Wednesday, the market debate over whether the US economy is just slowing or headed for recession is "going to be ongoing" over the next few months.

"The fact is we are in a period of slowing US economic growth," Kaiser said. "And the market is constantly debating right now, is that going to be a soft landing or hard landing, and how do I tell the difference between the two in real time?"

Warner Bros. Discovery (WBD) will report second quarter earnings after the bell on Wednesday as the media giant struggles with a declining linear TV business, unfavorable ad market, and the loss of its key NBA media rights.

Investors will be closely watching for further commentary on the loss of those rights, especially after WBD filed a lawsuit against the NBA over what it said was the league's "unjustified rejection" of the company's matching rights proposal.

Here's what Wall Street expects for the second quarter, according to Bloomberg estimates:

• Revenue: $10.12 billion versus $10.36 billion in Q2 2023

• Adjusted loss per share: -$0.19 versus -$0.51 in Q2 2023

• Subscriber net additions: 1.89 million versus 1.80 million in Q2 2023

In May, the company reported a profitable direct-to-consumer (DTC) division for the first quarter, posting $86 million in profit, a $36 million year-over-year improvement. The positive results came after the company turned a profit for its streaming unit for full year 2023, posting $103 million in EBITDA compared with a loss of about $2.1 billion in full year 2022.

WBD CFO Gunnar Wiedenfels said during the company's first quarter earnings call that he expects the company to remain profitable in its DTC segment throughout 2024, despite heavy launch investments overseas.

"I remain fully confident in our path to achieve our $1 billion-plus EBITDA target for 2025 and our growth ambitions thereafter," Wiedenfels said at the time.

In its latest media rights negotiations, the NBA passed on WBD in favor of two newcomers: tech giant Amazon (AMZN) and Comcast's NBCUniversal (CMCSA). The league was able to strike a new rights agreement with its other current media partner, Disney (DIS). WBD's current rights will expire at the end of next season.

The company has struggled in recent quarters, with profits hit by a weak linear advertising environment and pressure on affiliate fees, or the fees pay TV providers pay to network owners to carry their channels.

That's likely to impact second quarter EBITDA and put full-year adjusted EBITDA at risk of falling below $10 billion, according to the latest Bloomberg estimates. That's $4 billion below what analysts had expected at the time of its merger.

Read more in this post, which will be updated with the results after the bell.

All three of the major averages reversed course in afternoon trading.

The benchmark S&P 500 (^GSPC) was down 0.5%, while the tech-heavy Nasdaq Composite (^IXIC) slipped about 0.7%. The Dow Jones Industrial Average (^DJI) was off about 0.5%. All three of the major averages had been up more than 1% at some point during the session.

Technology (XLK) attracted the most selling, with the sector down more than 1%, after rising more than 2.5% at the open.

After starting the morning strong, the rebound in the tech trade lost steam in afternoon trading.

Technology began lagging behind the benchmark S&P 500 as a nearly 3% gain for Nvidia (NVDA) at the open shifted to a more than 1% decline.

Meanwhile, Energy led the gains across the eleven sectors, driven by more than 4% gains in both Devon Energy (DVN) and Enphase Energy (ENPH).

Below is a look at the sector action in afternoon trade.

Markets are rallying again on Wednesday as stocks mount a comeback from the worst three-day selloff of 2024.

Citi head of US equity trading strategy Stuart Kaiser told Yahoo Finance the recent market action is the market "digesting" and that while recent economic data showed some cracks in the growth story, it "wasn't horrible."

This, combined with easing technical headwinds seen amid the market's largest volatility spike since 2020, has allowed the selling to cool in recent trading sessions.

But, Kaiser points out, the market debate over whether the US economy is just slowing or headed for recession is "going to be ongoing."

"The fact is we are in a period of slowing US economic growth," Kaiser said. "And the market is constantly debating right now, is that going to be a soft landing or hard landing, and how do I tell the difference between the two in real time?"

Kaiser noted the next check on this will come with the release of weekly jobless claims on Thursday morning, but the debate will remain in focus as economic data flows in over the next two or three months.

Nvidia (NVDA) stock rose almost 1% amid a broader gain in chip stocks after Piper Sandler analysts pointed investors to a "tremendous opportunity" to buy shares of the chip giant after falling more than 25% from recent highs.

"Fundamentally, NVDA remains the strongest player in the AI accelerator space," wrote Piper Sandler's Harsh Kumar, highlighting the company's next-generation chip. "We also believe that strong tailwinds from the Blackwell architecture coming in October will continue to drive revenues well into 2025 as demand exceeds supply."

"As such," the firm added, "we see tremendous opportunity in NVDA stock with the price off meaningfully from highs of $140." Piper has an Overweight rating and $140 price target on the stock.

Read more here.

Super Micro Computer (SMCI), once an AI darling, fell more than 17% after reporting quarterly results on Tuesday night, which revealed weaker-than-expected margins.

Super Micro's gross margin for fourth quarter gross margin came in at 11.3%, about 2 percentage points below estimates. The company also reported adjusted earnings per share of $6.25, well below analyst estimates of $8.25 per share.

As has been the case with other tech names over the past few weeks, investors expressed concern over how Super Micro's role in the global AI buildout will be a near-term profit boost.

Bank of America analyst Ruplu Bhattacharya wrote in a note to clients that Super Micro's better-than-expected revenue guidance indicates "AI demand remains strong," but supply delays and margin concerns remain headwinds in the near term.

Bhattacharya downgraded the stock to Neutral from Buy and slashed his price target to $700, down from $1,090.

Super Micro was trading around $506 on Wednesday morning, off nearly 60% from its 52-week high seen in March. Still, shares are up almost 80% this year.

Airbnb (ABNB) stock sank more than 14% Wednesday morning, its largest drop at the open since becoming a publicly traded company, after the company reported weaker-than-expected quarterly results on Tuesday night after the market close.

Airbnb's third quarter quarter guidance for revenue of $3.67 billion fell short of Wall Street's estimates for $3.73 billion as the travel giant warned about a slowing consumer.

"We are seeing shorter booking lead times globally and some signs of slowing demand from US guests, and our Q3 outlook incorporates these recent trends," Airbnb CEO Brian Chesky said on the company's earnings call Tuesday night.

The potential of a softening consumer outlook caught Wall Street's attention, as it could be pointing to a broader trend in the travel industry.

"While travel has been resilient for a long time coming out of the pandemic, trends observed by ABNB, along with what [Booking Holdings] noted last week — i.e. softness in Europe, some trade down of travel in the US, and normalization of booking windows — should weaken investor sentiment around online travel broadly & [Expedia} specifically into its earnings this Thursday," JPMorgan analyst Doug Anmuth wrote in a note to clients Wednesday morning.

US stocks rose early Wednesday as investors looked to build on Tuesday's rebound that snapped a three-day losing streak for the major averages.

The benchmark S&P 500 (^GSPC) rose nearly 1.3% while the tech-heavy Nasdaq Composite (^IXIC) was up almost 2%. The Dow Jones Industrial Average (^DJI) rose about 0.5%, or nearly 200 points.

Tech was the leading sector once again on Wednesday as the sector continues to bounce back from the recent sell-off. The bounce was particularly seen in megacap tech, where Nvidia (NVDA) led the charge, rising more than 3%.

Disney (DIS) on Wednesday reported that its total streaming division turned a profit for the first time, though weakness in its parks division dented an otherwise positive report, with the company noting a "moderation of consumer demand" towards the end of the quarter.

In Disney's fiscal third quarter, its direct-to-consumer (DTC) streaming business, which includes Disney+, Hulu, and ESPN+, posted operating income of $47 million, compared to a loss of $512 million in the prior-year period. The company had previously expected to achieve total streaming profitability by the current quarter.

Overall, the company reported Q3 adjusted earnings of $1.39 per share, above the $1.19 analysts polled by Bloomberg had expected and higher than the $1.03 Disney reported in the prior-year period.

Revenue came in at $23.2 billion, exceeding consensus expectations for $23.1 billion and higher than the $22.3 billion reported in the year-ago period.

Disney also raised its guidance for full-year adjusted earnings growth to 30%, up from the prior 25%.

Disney stock rose as much as 3% in premarket trade on Wednesday before forfeiting these gains. Coming into the report, Disney stock was roughly unchanged this year.

Looking ahead, Disney said it remains on track for streaming profitability to improve in the fourth quarter, with both DTC entertainment (which posted a loss of $19 million in Q3) and ESPN+ expected to be profitable.

"We continue to feel optimistic about our trajectory, with multiple building blocks for improving margins over the coming years," the company said in the release.

One of those building blocks will be new price hikes for these services. On Tuesday, the company announced it would again raise prices across its Disney+ and Hulu plans, with these changes set to take effect in October.

The parks business was Disney's main disappointment in the quarter, with domestic operating income dropping 6% from the prior year to $1.35 billion. The company warned demand moderation could continue over "the next few quarters."

The company added that Disneyland Paris will be impacted by a reduction in normal consumer demand trends due to the Olympics, along with some cyclical softening in China. The company said it continues to see "strong" demand for its cruises.

Read more about the results here.