Wall Street Slips as Chip Stocks Fall Ahead of Inflation Data
U.S. stocks ended slightly lower on Tuesday as investors weighed mixed bank earnings and waited for the September inflation report. Semiconductor shares fell…
Stocks closed lower on Tuesday as investors assessed mixed bank earnings and looked ahead to Wednesday’s September inflation report, according to market reports. The S&P 500 finished almost unchanged, while semiconductor shares fell after reports that China’s CXMT was making progress on memory chip designs.
The Dow Jones Industrial Average declined 0.4% to 51,670, and the Nasdaq Composite slipped 0.2% to 27,204. The S&P 500 edged down 0.02% to 7,805. Traders now face a key inflation reading that could shape expectations for the Federal Reserve’s next move.
Chip stocks took a hit.
SK Hynix fell 3.2% and Micron Technology dropped 3.6%, weighing on the Nasdaq. Reuters also reported that U.S. chipmakers slid as investors reacted to reports of technological progress by China’s CXMT, which raised competition concerns.
Investors were also sorting through the first major bank results of earnings season. JPMorgan Chase reported second-quarter earnings of $5.75 per share, up 13.4% year over year but below analysts’ estimates. Its revenue of $50.2 billion also missed expectations, according to the source report.
David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, said JPMorgan had a rare miss against expectations. He said the shortfall was partly tied to securities losses and that the bank had reduced share repurchases during the quarter, while describing the franchise as healthy.
Bank results and inflation in focus
Results across the sector were mixed. Wells Fargo fell short on revenue, while Goldman Sachs and Citigroup beat expectations for both revenue and earnings, according to the report. Shares in Wells Fargo fell 3.1%, Goldman Sachs slipped 0.2%, and Citigroup declined 5.6%.
Johnson & Johnson was the weakest Dow component, falling 5.7% after reporting earnings. The company beat third-quarter estimates for earnings and revenue, but its medical devices sales missed Wall Street expectations. The report linked the shortfall to the ongoing conflict in the Middle East.
J&J Chief Financial Officer Joe Wolk told CNBC that some countries still value premium healthcare systems, but their budgets are being redirected toward defense. His comments pointed to how geopolitical pressures can affect business lines far beyond the conflict zone.
That matters to investors because the market’s next broad signal is the September Consumer Price Index report. UBS Global Research economists said an upside surprise, especially in core inflation, could revive debate about an October Federal Reserve move and shift market pricing. A reading closer to forecasts, they said, would give policymakers room to wait.
Reuters reported that analysts expect S&P 500 earnings to grow 30.6% year over year for the July-September period, according to LSEG data. That earnings outlook has helped support stocks amid geopolitical turmoil, rising bond yields and inflation concerns.
Bumble rallies on take-private agreement
Bumble shares surged 56.6% after news that Ithaca Holdings would take the dating app company private in an all-cash deal valued at $1.3 billion. The stock was up 134% for the week, according to the report.
Bumble went public in 2021 and closed its first trading day with a market capitalization of $7.7 billion. Its current market value was closer to $783 million, the source said. Founder and Chief Executive Whitney Wolfe Herd said Ithaca shared the company’s vision and women-first mission and was committed to investing in its future.
Wednesday’s trading will bring another round of bank earnings, including reports from Bank of America and Morgan Stanley. Investors will also receive the September CPI reading, the next scheduled data point at the center of market attention.
Source: finance.yahoo.com
