Wall Street Ends in the Red: Nasdaq Leads Losers

The major U.S. stock market indexes ended the day lower on Tuesday. The tech-heavy Nasdaq was the biggest loser, losing 1% as chip-related stocks declined. Meanwhile, the energy sector also fell, this time by 3%, amid lower oil prices.

Mixed Reports, UnitedHealth Shares Sink

Quarterly earnings reports were mixed, prompting mixed reactions from investors. While some companies posted positive results, UnitedHealth shares slumped 8% after outlook for 2025 was below Wall Street expectations.

Nvidia Under Pressure: Chip Market in Red Zone

The Nasdaq was under intense pressure, mainly due to a sharp drop in shares of Nvidia, the largest maker of chips for artificial intelligence. The company's shares fell 4.7% after hitting a record high the day before. The decline was driven by speculation that the Biden administration could impose new restrictions on the export of U.S. AI chips.

Chip Market Pessimism: ASML Shares Plunge

Chip makers also suffered a sharp sell-off after disappointing data from hardware maker ASML Holdings. The company issued disappointing sales guidance for 2025, sending its shares down 16%. That, in turn, weighed on the Philadelphia Semiconductor Index, which lost 5.3% in a day, its biggest drop since September.

The mixed earnings and heightened regulatory risks weighed on investor sentiment, which was reflected in Wall Street's leading indexes.

Energy Sector Plunges: Record Drop Since October

The energy sector index (.SPNY) posted its biggest single-day drop, falling 3%, its biggest since early October 2023. The key factor was the news that Israel has no plans to attack Iranian oil facilities, which eased concerns about possible supply disruptions and, accordingly, lowered commodity prices.

New Records Amid Overall Decline

Interestingly, just the previous session, the Dow and S&P 500 closed at record highs. However, such a bright rise was overshadowed by subsequent sell-offs, which primarily affected the technology sector.

Tech Sector Continues to Fall

Following energy, the S&P 500 technology index (.SPLRCT) suffered significant losses, falling by 1.8%. Tech giants are under pressure amid growing concerns about regulation and demand for products, especially in the context of the semiconductor industry.

Defensive Assets on the Rise

Against this backdrop, defensive sectors showed confident growth. Real estate (.SPLRCR) turned out to be the leader, adding 1.2%. It was followed by shares of companies producing essential goods (.SPLRCS), which rose by 0.6%, and utilities (.SPLRCU) with an increase of 0.5%. These sectors are traditionally seen as safe havens for investors during periods of market turmoil.

Financials: Winners and Losers

The financial sector saw mixed results. Bank of America rose 0.5% after reporting better-than-expected third-quarter profit growth. Charles Schwab also rose 6%, beating analysts' estimates. However, Citigroup fell 5% after the bank reported lower net income and lower-than-expected net interest income. Meanwhile, Citigroup's investment arm saw debt underwriting income support.

Apple Bucks the Trend

While most tech stocks were down, Apple was an exception. Apple ended the day up 1.1%, continuing to delight investors after recently hitting a record high. The gains show that even amid uncertainty, the tech giant remains an attractive asset for investors.

Overall, the trading session was mixed, with sharp swings in chips and oil offset by gains in safe havens and stability in individual companies like Apple and Bank of America.

Walgreens Jumps Ahead as Store Closures Rise

Shares in Walgreens Boots Alliance (WBA.O) jumped a whopping 15.8% after the company beat Wall Street's lower estimates for adjusted fourth-quarter profit. In addition, Walgreens announced it would close 1,200 stores as part of a cost-cutting strategy, a move that investors welcomed.

Focus on Economic Data Ahead

Investors are eagerly awaiting a fresh round of earnings data, as well as key economic indicators such as retail sales and industrial production, which could have a major impact on market sentiment.

Fed's View: Inflation Remains Under Control

On Tuesday afternoon, San Francisco Federal Reserve President Mary Daly emphasized that despite the interest rate cut in September, policymakers are continuing to work to further reduce inflation. The comment sent a strong signal to the market that the Fed remains focused on controlling rising prices.

Traders Expect More Rate Cuts

According to CME FedWatch, traders are pricing in a 98% chance that the Fed will cut interest rates by 25 basis points in November. That expectation is already priced into the market and continues to fuel investor activity in the hopes of easier lending conditions.

Stock Market Balance: Bears Just Edge Up

On the New York Stock Exchange, decliners outnumbered advancers by a narrow margin of 1.01 to 1. Despite this, there were 514 new highs and only 41 new lows, indicating that the overall positive trend is continuing.

Nasdaq: Slightly outweighed the decliners

The Nasdaq also saw pressure on stocks, although the gap between decliners and gainers was small, at 1.05 to 1. On the day, 2,109 stocks rose, while 2,214 declined. Despite this, the Nasdaq Composite posted 173 new highs, which is an encouraging sign for investors.

S&P 500 and Nasdaq: Growth in a volatile environment

The S&P 500 has posted 112 new highs over the past 52 weeks, while posting no new lows. The Nasdaq Composite also posted solid results, with 173 new highs and 82 new lows. These figures show that despite local fluctuations, investors continue to find growth opportunities even in the face of market uncertainty.

Thus, current trends show a combination of cautious optimism with continued attention to macroeconomic data and Fed policy.

US Stock Exchange Activity on the Rise

Yesterday, 12.85 billion shares changed hands on US stock exchanges, which exceeded the average volume over the past 20 days of 12.18 billion shares. The increase in market activity reflects growing investor interest despite volatility.

Financial giants delight investors

The financial sector continues to show solid results. The largest banks Goldman Sachs, Citigroup and Bank of America beat earnings expectations, which caused positive sentiment among investors. The data confirmed that the largest banks are successfully coping with the challenges of a difficult economic environment.

Disappointments in the healthcare sector

However, not all results were pleasing to the market. Healthcare companies UnitedHealth and Johnson & Johnson published reports that did not meet analysts' expectations. Disappointing financial results triggered a wave of selling in the sector, reflecting investor concerns about the future amid rising competition and costs.

ASML and the Semiconductor Sector's Troubles

Dutch chipmaker ASML shocked the market with weak orders and a pessimistic third-quarter sales outlook. The news was a major blow to the entire semiconductor sector, sending shares of many companies lower. The Philadelphia Semiconductor Index (.SOX) fell on the disappointing outlook.

The Future of the Market Depends on Technology

The U.S. stock market remains heavily dependent on the technology sector, according to Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. He noted that the performance of technology stocks can be a key indicator of the future direction of the overall market. However, as Haworth emphasized, the overall situation is not as pessimistic as it may seem at first glance.

Energy companies fall amid falling oil prices

The S&P 500 energy sector was one of the most vulnerable, posting the steepest percentage drop of any major sector in the index. Shares of companies fell by 3.04% due to a decline in global crude oil prices, raising concerns about the long-term stability of the sector.

Overall, despite the mixed results across sectors, activity in the market remains strong, with investors eagerly awaiting more economic data and company results to adjust their strategies.

US indices are back in the red

Yesterday's trading on Wall Street ended with significant losses. The Dow Jones Industrial Average fell by 324.60 points, which is 0.75%, to close the day at 42,740.62 points. The broader S&P 500 also fell 44.54 points, or 0.76%, to 5,815.31. The tech-heavy Nasdaq Composite lost 1.01%, falling 187.10 points to 18,315.59.

European stocks under pressure from weak outlook

European stock markets also had a tough day, posting their sharpest drop in two weeks. The reason was investor disappointment over ASML's sales outlook, which triggered a wave of sell-offs in the tech sector. This pressure was the main driver of the decline in European indices.

ECB rate decision in focus

Amid these events, investors in Europe are particularly keen to watch the European Central Bank's interest rate decision on Thursday. The move could be key to further market moves and provide new guidance for investors in an uncertain environment.

Global markets continue to fall

The MSCI Worldwide Index of shares fell 6.20 points, or 0.72%, to end at 850.98. Europe's STOXX 600 also slipped 0.8%, while the FTSEurofirst 300 fell 0.92%, losing 19.22 points. These figures confirm the global downward trend amid weak economic data and uncertainty in global markets.

Emerging markets suffer from volatility

Emerging market shares were no exception, with the MSCI Emerging Markets Index falling 11.40 points, or 0.98%, to end at 1148.66. These markets remain under pressure, reflecting the general instability in the global economy.

Oil prices fall amid easing risks

In the commodity markets, oil prices fell to a two-week low, continuing the negative dynamics that began on Monday. The main driver of the decline was the decline in fears about supply disruptions due to the conflict in the Middle East. Reports that Israel will not strike Iran's oil infrastructure eased the tension in the market and contributed to the decline in energy prices.

Thus, markets around the world continue to experience pressure both due to local news and amid global economic uncertainty, which is forcing investors to seek safe assets and revise their strategies.

OPEC and IEA reduce forecasts for global oil demand

OPEC and the International Energy Agency (IEA) have revised their forecasts for global oil demand downwards. The main reason was the weakness of the Chinese economy, which led to a deterioration in expectations for energy consumption. This put further pressure on oil prices.

Oil prices are falling: a positive signal for the economy

The decline in oil prices that we are seeing has a disinflationary effect and is a positive factor for the global economy, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. He added that the current price drop could be related to speculation that key oil facilities in the Middle East will be protected from attacks, reducing risks to supply.

However, according to the expert, the price drop also signals a decrease in global energy demand, which reflects the overall weakness in economic activity.

Sharp fall in oil prices

U.S. WTI crude oil fell by 4.40%, reaching $70.58 per barrel. The price of Brent crude oil fell by 4.14%, reaching $74.25 per barrel. This is a continuation of the negative dynamics that began against the backdrop of declining demand and weakening geopolitical risks in the Middle East region.

U.S. Treasury yields mixed

Amid weak industrial production data from the New York Federal Reserve, U.S. Treasury yields eased slightly after hitting a 2.5-month high. The 10-year yield fell 3.7 basis points to 4.036%, while the 30-year yield fell 5.8 basis points to 4.3237%.

Short-term bond rates remain elevated

The 2-year yield, a proxy for interest rate expectations, rose slightly, up 1.1 basis points to 3.952%. That reflects market sentiment that participants continue to consider the possibility of further Fed tightening in the near term.

Dollar weakens amid rate cut expectations

The US dollar weakened slightly against a basket of global currencies, which is associated with traders' expectations that the Federal Reserve may ease its monetary policy in the coming months. Despite this, the dollar remains stable overall, which continues to attract investors during a period of global economic uncertainty.

So, amid falling oil prices and mixed bond dynamics, the market continues to wait for further action from the Fed, which affects investor behavior and currency dynamics.

Dollar strengthens amid weakening euro and yen

The dollar index, which measures the dollar against a basket of currencies including the euro and the Japanese yen, showed a small increase of 0.06%, reaching 103.24. At the same time, the euro weakened by 0.2%, falling to $1.0887, which reflected continued volatility in the currency markets. The dollar also weakened against the Japanese yen, falling 0.37% to 149.2 yen per dollar.

Gold Strengthens as Bond Yields Fall

Traditionally seen as a safe haven during times of market turmoil, gold continued its ascent. Falling U.S. Treasury yields helped boost the precious metal's appeal. Spot gold rose 0.4% to $2,661.80 per ounce.

Nvidia Slips as Tech Giant Under Pressure

Nvidia, the leader in AI chips, suffered one of the biggest declines ever. After briefly overtaking Apple in market capitalization, its shares fell 4.5%, wiping out about $158 billion in market value. Now the gap between Nvidia and Apple, which has a market capitalization of $3.56 trillion, has widened again.

Tech giants under pressure as chip market declines

Nvidia's decline dragged down other semiconductor companies with it. AMD, Intel, Arm, Broadcom and Micron were down 3.2% to 5% by the close of trading on Tuesday. The decline weighed heavily on the Philadelphia Semiconductor Index, which fell nearly 5%, putting additional pressure on the Nasdaq.

Asian chipmakers are also losing ground

The negative trends in the chip market were reflected in Asian chipmakers. Taiwan Semiconductor Manufacturing Co lost 1.9%, while South Korean giants Samsung Electronics and SK Hynix fell 2.1% and 2.5%, respectively. This came as global pressure on the semiconductor sector increased due to general concerns about demand and weak forecasts from ASML. Thus, the current state of the global market continues to be influenced by technology and currency factors, forcing investors to rethink their strategies and assess new risks.

Samsung predicts profit decline: AI chip market under pressure

Samsung Electronics warned investors this month that its third-quarter profit will likely fall short of market expectations. The main reason is that the company is struggling to capitalize on the growing demand for artificial intelligence (AI) chips. This alarm bell highlights that not all market participants are able to equally benefit from the AI revolution.

TSMC on a wave of success thanks to AI

While Samsung is struggling with low profits, its rival Taiwan Semiconductor Manufacturing Co (TSMC) is showing the opposite results. TSMC, a major chip supplier to Nvidia, is expected to report a 40% increase in profit for the third quarter. TSMC's success underlines its leading role in the production of chips for advanced technologies and AI solutions.

US Prepares New Export Restrictions on AI Chips

The situation in the chip market is complicated by new geopolitical risks. According to Bloomberg News, US officials are considering introducing new restrictions on export licenses for artificial intelligence chips. These measures may be aimed at the Gulf states and are dictated by national security concerns. Washington is concerned that the Middle East could become a transit corridor for China, which is seeking access to advanced American technology despite the current bans.

The US seeks to maintain leadership in AI

Danny Hewson, head of financial analysis at AJ Bell, commented on the US actions, noting that it is important for Washington to maintain its technological leadership in the field of artificial intelligence. "The revolution in AI is expected to be a major driver of productivity growth and technological advances, and it is not surprising that the US is prepared to take decisive measures to protect its dominance," the expert noted.

Chip Industry in Focus

As the global race for technological supremacy continues, the future of the chip market remains in question. Both Samsung and TSMC are presenting two different approaches to overcoming the challenges of AI chip manufacturing. And policy decisions could significantly impact the industry's dynamics in the coming months.