The New York Stock Exchange ended lower on Tuesday, weighed down by the semiconductor and technology sector, as investors took a position ahead of US inflation on Wednesday.
According to final results, the Dow Jones index fell 0.18% to 32,774.41 points and the S&P 500 0.42% to 4,122.47 points, while the Nasdaq fell 1.19% to 12,493.93. points.
Despite President Joe Biden signing legislation to support more than $50 billion in investment in the semiconductor industry, he darkened the session after several pessimistic warnings about the immediate demand for electronic components.
Micron Technology (-3.74%) warned that its quarterly revenue could fall below its forecast. The group expects a drop in demand for memories from its customers due to economic uncertainties, while supply difficulties are disrupting the management of companies’ inventories.
The day before, Nvidia (-3.97%), another semiconductor manufacturer specializing in graphics cards, had also warned that its second quarter would suffer a “significant slowdown on the side of video games”.
These two announcements dragged down the entire sector, from AMD (-4.53%) to Qualcomm (-3.59%) to Intel (-2.43%) and even Amazon (-1.13% ), a big name in the cloud, dematerialized computing, and a big consumer of microprocessors.
“The + chips + law (chips) which we knew was going to be signed by the president was already integrated by the market”, explained Tom Cahill, of Ventura Wealth Management, to AFP. “It was the warnings from Micron and Nvidia that counted.”
“It seems that the technology sector as well as the rest of the economy is slowing down,” said the analyst, recalling that during the pandemic, the demand for technological equipment had largely increased with telework, a momentum which is growing. was now exhausted.
Another major player in video games, the American publisher Take-Two Interactive (“Grand Theft Auto”), which at the beginning of the year bought out the developer of games for mobile phones Zynga at a high price, clearly faltered (-3 .78%) after announcing results well below forecasts for its first quarter.
According to analyst firm Games Market Dynamics, consumer spending on video games fell 12% in the second quarter of 2022, compared to a year ago.
– Anxiety before inflation –
Investor anxiety ahead of the release of inflation figures on Wednesday for the CPI consumer price index, Thursday for producer prices and Friday for the consumer confidence index also dampened the momentum of these last weeks.
Since the lows of June, “the Nasdaq has indeed rebounded by almost 20% and the S&P 500 by some 15%”, recalled Tom Cahill. “I think it was an opportunity today to position and take profits ahead of the inflation data,” he added.
Same story with Wells Fargo analysts who observed “cautiousness among investors pending the price index that may well determine the monetary path of the Federal Reserve (Fed)”.
The title of the developer of a vaccine against Covid-19, Novavax, listed on the Nasdaq, collapsed 29.64% to 40.28 dollars. The group announced, Monday after the close, sharply reduced sales prospects for 2022 due to disappointing demand for its vaccine.
Novavax posted a loss of $510 million in the second quarter, compared with a deficit of $352 million a year earlier.
As investors question the health of consumers in the face of price increases, several online sellers drank the cup, from Carvana (cars), which lost 10.83%, to Wayfair (Furniture), which melted of 17.04%.
On the bond market, two-year rates remained well above ten-year rates, which stood at 2.77%.