S&P 500 and Nasdaq futures fall on Tuesday as chip stocks decline
Traders on the floor of the NYSE, August 1, 2022.
S&P 500 futures fell on Tuesday after another chipmaker warned of tough times ahead following Nvidia’s poor forecast in the previous session.
S&P 500 futures lost 0.3% as chip stocks fell pre-market. Nasdaq 100 futures fell 0.7%. Dow Jones Industrial Average futures were little changed.
Memory chip maker Micron warned that revenue could be lower than its earlier forecast due to “macroeconomic factors and supply chain constraints”. The title fell nearly 4% at the start of the session.
It’s been a tough week for chipmakers. On Monday, Nvidia’s weaker-than-expected revenue forecast weighed on the group. Nvidia was down again in premarket trading on Tuesday, losing another 3% after falling 6% on Monday. The iShares Semiconductor ETF lost 1.5% in premarket trading on Tuesday after falling 1.5% on Monday.
The S&P 500 has climbed for three straight weeks, but the earnings season has been marred by demand warnings from big business executives. Investors are watching closely to determine how the Federal Reserve’s fight against inflation affects the economy.
“In our view, the Fed rate hikes are impacting the economy at the right time. We believe the tightening has just started to hit the economy broadly and our medium-term bearish base case remains intact.” , said Chris Senyek of Wolfe Research in a note. to customers on Tuesday.
Outside of the chips, a pair of Nasdaq-listed stocks was also hit early. Novavax fell 32% in premarket trading after cutting its full-year revenue forecast due to weak demand for its Covid vaccines. Upstart fell 13% in premarket trading after the consumer loan company reported second-quarter results that missed both profit and revenue expectations.
On the economic front, investors are awaiting July’s latest consumer price index reading, due Wednesday, for clarity on the path of the Fed’s interest rate hikes as it strives eradicate inflation, or at least slow it down.