U.S. equity markets stabilized on Wednesday after losses in technology stocks, driven by weak results from leading chipmaker ASML (ASML), pulled Wall Street away from its all-time highs.
Losses in the semiconductor sector hit Wall Street on Tuesday, with the NASDAQ Composite down nearly 1%, while both the S&P 500 and Dow Jones Industrial Average fell 0.8%, pulling back from their record highs.
The weakness followed semiconductor equipment maker ASML’s (ASML) decision to cut its full-year estimates due to weak demand for non-artificial intelligence chips. ASML’s stock dropped 16% on Tuesday and continued to decline in premarket trading on Wednesday.
Chipmakers were also rattled by reports that the U.S. government was considering limiting the sale of artificial intelligence-related chips to certain countries, a scenario that could hurt sales.
Nvidia (NVDA) fell 4.5%, while rivals AMD (AMD) and Intel (INTC) dropped about 5.2% and 3.3%, respectively.
Q3 Earnings Season Continues
Third-quarter earnings season continues this week. More results are expected on Wednesday, with Morgan Stanley (MS) rounding out banking sector earnings, following positive results from Goldman Sachs (GS), Citigroup (C), and Bank of America (BAC).
Abbott Laboratories (ABT) and U.S. Bancorp (USB) will also report their earnings on Wednesday, while Netflix (NFLX) is set to release its figures on Thursday.
Next week, earnings season will ramp up with reports from several key tech companies, including Alphabet (GOOGL) and Tesla (TSLA).
Beyond earnings, investors are also focused on speeches from several Federal Reserve officials, amid increasing speculation that interest rates may fall at a slower-than-expected pace.
Oil Stabilizes After Losses
Oil prices stabilized on Wednesday after recent sharp losses, as traders weighed signs of a potential easing of tensions in the Middle East and concerns about slowing demand growth from major oil exporter China.
Weak economic data from China has also added pressure, and both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) have revised their demand growth forecasts for the remainder of 2024 downward.
