Nasdaq falls as U.S. export controls on China weigh on chip stocks By Reuters

© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 7, 2022. REUTERS/Brendan McDermid

By Shreyashi Sanyal and Bansari Mayur Kamdar

(Reuters) – The Nasdaq hit a two-year low on Monday as chipmakers bore the brunt of U.S. efforts to hobble China’s semiconductor industry amid caution ahead of the start of the earnings season .

The 3.5% fall also hit a two-year low, after the Biden administration issued a series of export controls on Friday, including a measure to cut China off from certain semiconductor chips. manufactured all over the world with American equipment.

Some of the index’s largest constituents, including Nvidia (NASDAQ:) Corp, Qualcomm (NASDAQ:) Inc, Micron Technology Inc (NASDAQ:) and Advanced Micro Devices (NASDAQ:) fell between 1.13% and 3, 65%.

Major U.S. banks are set to kick off their third-quarter earnings season in earnest on Friday amid concerns about the impact of inflationary pressures, rising interest rates and geopolitical uncertainties on their earnings.

According to data from Refinitiv, corporate profits are now expected to rise 4.1% over the past three months, compared to an increase of 11.1% expected in early July, as more analysts anticipate a slowdown next year. .

“We are now entering earnings season, so there is some concern about continued weakness as seen in the second quarter,” said Jonathan Waite, fund manager and senior equity analyst at Frost. Investment Advisors.

Wall Street fell sharply on Friday following a strong jobs report for September that raised the likelihood that the US Federal Reserve will stick to its aggressive interest rate hike campaign and likely push the US economy in a recession.

Chicago Fed Chairman Charles Evans joined a chorus of other central bankers on Monday backing the Fed’s attempt to cut inflation without a sharp rise in unemployment, even as it continues to raise unemployment rates. interest rate.

“We had a pretty strong day on Friday and there’s very little change in the picture from the Fed’s perspective on inflation or how quickly rate hikes might continue to happen,” he said. Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center.

“So the volatility is going to be there until at least we get to the November 2 (Fed) meeting and probably a week after that when the mid-terms come around.”

Money markets are pricing in an 89% chance of another 75 basis point hike at the Fed’s November meeting.

Investors also awaited inflation reports throughout the week, including consumer price data, which is likely to have risen last month.

As of 12:01 a.m. ET, the was down 54.42 points, or 0.19%, at 29,242.37, the S&P 500 was down 21.12 points, or 0.58%, at 3,618, 54, and the was down 101.64 points, or 0.95%, at 10,550.77.

The tech giant Microsoft Corp. (NASDAQ:) fell 2.22%, weighing 1.6% on the S&P 500 technology sector index.

The US bond market was closed for the Columbus Day holiday on Monday.

Falling issues outnumbered advances by a 1.64-to-1 ratio on the NYSE and by a 1.68-to-1 ratio on the Nasdaq.

The S&P index recorded a new 52-week high and 49 new lows, while the Nasdaq recorded 38 new highs and 351 new lows.

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