I have my website which provides price compare services along with technical news and app updates information. All my products have images hosted on the domain itself but for some news and app updates, I often use the image urls from other sources rather than uploading at my end and then using it. Does this effect the SEO in any negative way.
Yes, although I'm not sure how to measure the negatives.
Essentially you will lose out on SEO by not having the pictures on your site; image searches do drive traffic, although the amount can be very minimal.
If you host the images, you also have control over their naming conventions, which you can utilize for them to perform well in image searches.
Also, like @closetnoc mentioned in the comments, you have no control over their file size in this scenario; if the images are bulky (not optimized), this can lead to a longer load time, which will affect SEO as well.