The S&P 500 and Nasdaq Composite were down sharply in afternoon trading Tuesday as chip stocks fell ahead of quarterly earnings reports from mega-cap tech companies.
The S&P 500 and the Nasdaq Composite were down 1% and 1.9%, respectively, after rising early in the session, while the Dow Jones Industrial Average was clinging to small gains. The S&P 500 and Nasdaq inched higher on Monday to close with gains for the second consecutive session.
The downturn Tuesday was led by Nvidia (NVDA), which was down more than 7%, and stocks of other chipmakers including Onsemi (ON) and Super Micro Computer (SMCI). The iShares Semiconductor ETF (SOXX) slid nearly 4%.
Investors are particularly focused on earnings reports from ‘Magnificent Seven‘ tech companies this week, with Microsoft (MSFT) set to report after Tuesday’s closing bell. Apple (AAPL), Meta (META), and Amazon (AMZN) will report later in the week, and the results of all the Mag 7 members are being closely watched after disappointing earnings from Google parent Alphabet (GOOGL) and Tesla (TSLA) sent the market reeling last week.
Tech stocks have lifted the broader market most of the year, but in recent weeks they’ve stumbled as investors shift into small-cap stocks that are expected to benefit most from widely anticipated interest rate cuts. The Mag 7 were down across the board on Tuesday, while the Russell 2000 small-cap index was up slightly.
Among big-name companies that reported earnings Tuesday morning, shares of Pfizer (PFE) were down slightly, while Dow components Merck (MRK) and Procter & Gamble (PG) fell sharply.
In addition to earnings, investors are focused on the Fed’s two-day policy meeting that kicks off Tuesday, amid rising expectations that interest rate cuts are imminent. The Fed is expected to leave its benchmark lending rate unchanged this week, but market participants will be looking for the central bank to provide confirmation that economic data has given the Fed enough confidence to cut rates at subsequent meetings.
The yield on the 10-year Treasury, which is sensitive to expectations for rate cuts, was down slightly 4.14%, its lowest level since March. Gold futures were up slightly, while crude oil was down about 1%, extending a weeks-long retreat.
P&G Dinged by Beauty and Diaper Sales Declines
49 minutes ago
Justin Sullivan / Staff / Getty Images
Shares of Procter & Gamble (PG) tumbled Tuesday after the consumer products giant missed revenue estimates as sales of its beauty products and diapers declined.
P&G reported fiscal 2024 fourth-quarter revenue was basically unchanged from last year at $20.53 billion, while the average of analysts surveyed by Visible Alpha came in at $20.75 billion. Adjusted earnings per share of $1.40 was above forecasts.
Beauty division sales fell 1% year-over-year to $3.72 billion, hurt by lower demand for the super-premium SK-II brand and in Greater China. Sales at its Baby, Feminine & Family Care unit dropped 3% to $5.01 billion. Chief Financial Officer Andre Schulten said that the company wasn’t able to innovate its Luvs diaper brand because of supply-chain constraints.
P&G shares were down nearly 6% in early-afternoon trading.
CrowdStrike Leads Nasdaq Decliners
2 hr 48 min ago
CrowdStrike (CRWD) shares were down sharply following a CNBC report that Delta Air Lines (DAL) has hired top attorney David Boies to pursue potential damages from the cybersecurity firm as well as Microsoft following the global IT outage on July 19.
Boies, chairman of Boies Schiller Flexner, represented the U.S. government in its antitrust case against Microsoft and helped secure same-sex marriage rights in California, CNBC noted.
The outage of Microsoft’s cloud services triggered by a defective CrowdStrike software update led to the cancellation and delay of thousands of flights worldwide, but Delta was the most heavily affected of the major airlines.
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CrowdStrike shares were down more than 8% in recent trading, leading Nasdaq decliners.
Arm Holdings Extends Decline Ahead of Earnings Report
3 hr 16 min ago
Shares in chip design giant Arm Holdings (ARM) were down 4% in early trading Tuesday, after tumbling more than 5% the previous session folowing a downgrade from HSBC.
The company, which is due to report earnings on Wednesday, has seen it’s stock price lose more than a quarter of its value since closing at a record high on July 10.
The downturn, however, has occurred on relatively light trading volume, indicating the shares could be undergoing a pullback rather than a longer-term reversal.
Read our full technical analysis here.
Stock Futures
4 hr 42 min ago
Futures tied to the Dow Jones Industrial Average were down 0.1%.
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S&P 500 futures were up 0.2%.
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Nasdaq 100 futures were up 0.3%
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