Stock Market Dow S&P Slip as Chip Stocks Weigh on Wall Street
U.S. stocks closed lower Tuesday as losses in semiconductor shares and mixed bank earnings weighed on major indexes. The Dow fell 0.4%, while the S&P 500 ended…
The stock market Dow S&P closed mixed to lower Tuesday as semiconductor shares fell and investors weighed results from major banks. The Dow Jones Industrial Average slipped 0.4%, the S&P 500 ended near flat, and the Nasdaq Composite lost 0.4% as chip stocks dragged on technology shares.
The moves came as third-quarter earnings season began, with bank results sending different signals about corporate performance and executive confidence. The next major focus for investors is the September consumer price index, due Wednesday morning, which could inform expectations for interest rates.
Chip stocks took the pressure. Memory makers Micron and SK Hynix fell after Chinese memory maker ChangXin Memory Technologies, or CXMT, announced progress on a new cell design that could intensify competition for larger global rivals, according to Yahoo Finance.
CXMT also said it plans to release a more powerful chip by year-end, according to a separate Yahoo Finance report. The Roundhill Memory ETF fell about 5% on Tuesday, while the VanEck Semiconductor ETF slipped 0.1%. Weakness in Micron outweighed gains in Nvidia and Broadcom.
The pullback followed a steep decline in South Korea’s KOSPI index, which fell more than 5% amid losses in memory stocks Samsung and SK Hynix. The pressure in the sector weighed on the Nasdaq, which the Yahoo Finance closing update said fell 0.4%.
Broadcom CEO Hock Tan also voiced caution about artificial-intelligence investing. “A lot of investors have no clue what they are investing in,” Tan said, after likening speculation on AI to “a casino” on Monday, Yahoo Finance reported.
Bank earnings leave investors weighing expectations
JPMorgan Chase reported a rare miss on expected profits, while Wells Fargo, Citigroup and Goldman Sachs exceeded analyst expectations, according to Yahoo Finance. The results marked the unofficial start of third-quarter earnings season.
Strong year-over-year profits at the banks did not fully ease concerns. Executives struck a more cautious tone after a strong second quarter, and the KBW Nasdaq Bank index fell 1.1%, according to the market close report.
JPMorgan’s shares dropped 0.9% by the close. Wells Fargo fell 3% after mixed quarterly results, while Goldman Sachs slipped 0.2% despite revenue that topped market forecasts, according to Yahoo Finance.
“These banks still reported strong numbers, it's just that expectations were high, and higher expectations is a risk for companies across the board during this current earnings season,” Rebecca Walser, chief investment officer at Walser Wealth Management, told CNBC, according to Yahoo Finance.
For investors, the combination matters because a company can report solid results and still face pressure when expectations are higher. Tuesday’s trading reflected that tension: bank earnings were uneven, while falling memory stocks added a separate source of weakness to the indexes.
Inflation data and more bank results ahead
Oil prices also moved lower Tuesday after Brent crude topped $106 per barrel, Yahoo Finance reported. The outlet said gasoline prices tied 2022 for the most days above $4 per gallon in a single year.
John Williams, president of the Federal Reserve Bank of New York, told Bloomberg he still viewed one more rate hike this year as potentially appropriate, but did not expect rates to need another increase in 2027, according to Yahoo Finance.
“I haven't changed my view that it may be appropriate to have one more rate hike,” Williams told Bloomberg News. “I don't think at this time I have any reason to believe that we would need to do more” after that.
Investors will examine the September consumer price index on Wednesday morning. A Dow Jones survey of economists projects annual inflation at 3.6%, up from 3.4% in August, according to Yahoo Finance.
Bank earnings continue Wednesday morning, with Bank of America and Morgan Stanley scheduled to report, alongside financial updates from Dutch chip-equipment maker ASML. Those releases will give investors more evidence to weigh as they assess corporate results, inflation and the direction of interest rates.
Source: finance.yahoo.com
