Nasdaq falls for the third straight day as chip stocks weigh on the market

Traders work on the floor of the New York Stock Exchange (NYSE) in New York on August 8, 2022.

Andrew Kelly | Reuters

Stocks fell on Tuesday as investors navigated a string of disappointing corporate reports ahead of a key inflation read.

The S&P 500 fell 0.5%, while the Nasdaq Composite fell 1.3%. The Dow Jones Industrial Average fell 74 points, or 0.2%.

The declines came after memory chipmaker Micron warned that revenue could fall short of its earlier forecasts due to “macroeconomic factors and supply chain constraints.” The stock fell more than 5%.

It’s been a tough week for chipmakers. On Monday, Nvidia’s weaker-than-expected sales forecast weighed on the group. Nvidia was back lower on Tuesday, shedding another 4% after a 6% drop on Monday. The iShares Semiconductor ETF lost more than 4% on Tuesday after falling 1.5% on Monday.

“These are two big players that I think investors thought were in a better position to navigate some of these recent supply chain issues. I think there are concerns that this is going to really weigh on the technology,” said Ed Moya, senior market analyst at Oanda.

The S&P 500 is up for three straight weeks, but the earnings season has been marked by demand warnings from executives at large companies. Investors are watching closely how the Federal Reserve’s fight against inflation is affecting the economy.

“All we get is [showing] that inflation has a much stronger impact on the prospects for American companies, and so I think it will be difficult to continue buying stocks in this market,” Moya added.

Aside from the chips, two Nasdaq-listed stocks also suffered early setbacks. Novavax plummeted 27% after lowering full-year sales guidance on weak demand for its Covid vaccines. Upstart fell nearly 10% after the consumer finance company released second-quarter results that missed both earnings and revenue expectations.

On the economic front, investors are awaiting the latest July CPI data, due Wednesday, to find some clarity on the path of rate hikes by the Fed as it works to stamp out or at least slow inflation.

https://www.cnbc.com/2022/08/08/stock-market-futures-open-to-close-news.html Nasdaq falls for the third straight day as chip stocks weigh on the market

Joshua Buckhalter

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