(New York) 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.
Updated August 9
According to final results, the Dow Jones index fell 0.18% to 32,774.41 points and the S&P 500 0.42% to 4122.47 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 foresees 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 cloud computing, dematerialized computing, and a big consumer of microprocessors.
“The flea law, which we knew was going to be signed by the president, was already priced in by the market,” Tom Cahill of Ventura Wealth Management told 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”, indicated the analyst, recalling that during the pandemic, the demand for technological equipment had largely increased with teleworking, a momentum which is growing. was now exhausted.
Another major player in video games, the American publisher Take-Two Interactive (notably known for Grand Theft Auto), which at the start of the year bought out mobile game developer Zynga at a high price, fell sharply (-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.
Canada’s largest stock market lost more than 90 points. The S&P/TSX Composite Index lost 90.87 points to end the day at 19,578.30.
The Canadian dollar was trading at 77.64 cents US, compared to 77.78 cents US on Monday.
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 “caution among investors pending the price index that could well determine the monetary path of the Federal Reserve (Fed)”.
Shares of NASDAQ-listed COVID-19 vaccine developer Novavax fell 29.64% to $40.28. The group announced, Monday after the close, a sharply reduced sales outlook 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 have had a drink, from Carvana (cars), which lost 10.83%, to Wayfair (Furniture), which has melted of 17.04%.
On the bond market, two-year rates remained well above ten-year rates, which stood at 2.77%.