Markets Wrap: Stocks Retreat as Nvidia and ASML Weigh Down Markets, Dow Drops 300 Points

Stock Market Wrap

Markets Wrap: Stocks Retreat as Nvidia and ASML Weigh Down Markets, Dow Drops 300 Points

Oct 15, 2024

Market Overview:

Stocks fell on Tuesday as traders processed mixed corporate earnings and renewed concerns over semiconductor sales. The Dow Jones Industrial Average lost 324.80 points, or 0.75%, to close at 42,740.42, while the S&P 500 declined 0.76% to 5,815.26, and the Nasdaq Composite dropped 1.01% to 18,315.59.

Semiconductor companies led the decline, with ASML Holdings NV plunging 17% after issuing a surprise guidance cut, and further pressure came from Nvidia, down 5%, and AMD, which slipped 4.5%. This sector has been hit by both a cautious recovery outlook and concerns over tighter U.S. restrictions on AI chip sales. The VanEck Semiconductor ETF fell 5.4%, marking its worst performance since September.

On the economic front, Treasury yields fell as the 10-year yield declined six basis points to 4.04%. Oil prices plunged 5%, driven by easing concerns about a potential disruption to Iran’s oil supply after reports indicated Israel might not target Iranian crude infrastructure. Despite these declines, analysts remain optimistic about the broader market’s resilience amid strong third-quarter earnings results.

Corporate News:

ASML Holding NV: The semiconductor firm saw shares drop 17% following a surprise reduction in its outlook, prompting a broader selloff in the tech sector.
Nvidia and AMD: Both companies were caught in the semiconductor selloff, with Nvidia falling 5% and AMD dropping 4.5%, driven by news of possible U.S. restrictions on AI chip sales to specific countries.
Boeing Co.: Boeing is preparing to raise up to $25 billion in funding to navigate a series of operational setbacks and ongoing strikes.
UnitedHealth Group Inc.: Shares fell 8.1% after the company cut its full-year earnings outlook, weighing heavily on the Dow.
Johnson & Johnson: The healthcare giant exceeded earnings expectations for the third quarter, driven by robust sales of its cancer drug Darzalex.
PNC Financial Services: Surpassed net interest income expectations, reporting another strong quarter of sequential growth.
Walgreens Boots Alliance: Announced plans to close 14% of its U.S. stores in a cost-cutting measure amid weakening consumer demand.
LVMH: Fashion and leather goods sales fell for the first time since the pandemic, driven by reduced demand from Chinese consumers.
Adidas AG: The company raised its annual profit forecast for the third consecutive quarter, citing sustained demand for retro sneakers and successful sales of its Yeezy inventory.

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