US equities are seen extending downside amid negative reaction to corporate earnings news from companies like Tesla and Alphabet. The major averages on Wall Street saw further downside late in the session, closing near their worst levels of the day. The Nasdaq plunged 654.94 points or 3.6 percent to 17,342.41, the S&P 500 dove 128.61 points or 2.3 percent to 5,427.13 and the Dow slumped 504.22 points or 1.3 percent to 39,853.87.

Broad tech sell-off after underwhelming megacap earnings raised doubts about the sustainability of the artificial intelligence-driven bull market. Shares of Google parent Alphabet dropped 5% on the company's higher-than-expected spending on AI efforts and disappointing YouTube advertising revenue. Tesla's shares tumbled 12.3%. Chip stocks also tumbled as Nvidia sank 6.8%.

In U.S. economic news, the Commerce Department released a report unexpectedly showing a continued decrease by new home sales in the U.S. in the month of June. The report said new home sales fell by 0.6 percent to an annual rate of 617,000 in June after plummeting by 14.9 percent to a revised rate of 621,000 in May. US treasuries came under pressure over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.7 basis points to 4.286 percent after hitting a low of 4.210 percent. The preliminary Q2 US GDP figures due later today, followed by the June PCE price index report on Friday are keenly awaited.

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