Nasdaq falls as US export controls on China weigh on chip stocks

By Shreyashi Sanyal and Bansari Mayur Kamdar

Oct 10 (Reuters) – The Nasdaq hit its lowest level in two years on Monday as chipmakers bore the brunt of U.S. efforts to stifle China’s semiconductor industry, while investors showed caution before the start of earnings season.

The Philadelphia SE Semiconductor Index (.SOX) fell 2.7%, after the Biden administration issued a sweeping package of export controls on Friday, including a measure to cut China off from certain semiconductor chips. – conductors manufactured all over the world with American equipment. Read more

Some of the largest constituents in the index, including Nvidia Corp (NVDA.O), Qualcomm Inc (QCOM.O), Micron Technology Inc (MU.O) and Advanced Micro Devices (AMD.O) fell between 1. 3% and 3.3% at the start of the session. .

Major U.S. banks are set to kick off their third-quarter earnings season in earnest on Friday amid concerns about the impact of inflationary pressures, rising interest rates and geopolitical uncertainties on their earnings.

According to data from Refinitiv, earnings for S&P 500 companies are now expected to rise 4.1% over the past three months, compared to an 11.1% increase expected in early July, as more analysts forecast a slowdown l ‘next year.

The US bond market was closed for the Columbus Day holiday on Monday.

“It’s one of those weird near-holidays where stock markets are open, but bond markets are closed. We really have little to no economic data and no real hard catalyst for the markets today,” said Art Hogan, chief market strategist at Riley’s B. Wealth.

“Volumes will be low, stocks will likely fluctuate and wait for a real catalyst and everyone to be back in the field tomorrow.”

Wall Street fell sharply on Friday following a strong jobs report for September that raised the likelihood that the US Federal Reserve will stick to its aggressive interest rate hike campaign and likely push the US economy in a recession.

Chicago Fed Chairman Charles Evans joined a chorus of other central bankers on Monday backing the Fed’s attempt to cut inflation without a sharp rise in unemployment, even as it continues to raise unemployment rates. interest rate. Read more

“We had a pretty strong day on Friday and there’s very little change in the picture from the Fed’s perspective on inflation or how quickly rate hikes might continue to happen,” he said. Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center.

“So the volatility is going to be there until at least we get to the November 2 (Fed) meeting and probably a week after that when the mid-terms come around.”

Money markets are pricing in an 89% chance of another 75 basis point hike at the Fed’s November meeting. read more read more

As of 9:53 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 54.93 points, or 0.19%, at 29,351.72, the S&P 500 (.SPX) was down 9.31 points, or 0.26%, at 3,630.35 and the Nasdaq Composite (.IXIC) was down 73.99 points, or 0.69%, at 10,578.41.

Tech giants Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) fell 0.9% and 1.5%, respectively, weighing on the S&P 500 tech sector index (.SPLRCT).

Advancing issues outnumbered declining issues with a 1.11-to-1 ratio on the NYSE. Falling issues outnumbered advances by a 1.35-to-1 ratio on the Nasdaq.

The S&P index recorded a new 52-week high and 22 new lows, while the Nasdaq recorded 33 new highs and 200 new lows.

Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Anil D’Silva

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