Written by Sinead Carew and Lisa Pauline Matakkal
(Reuters) – Wall Street's main stock indexes closed lower on Tuesday, with semiconductor stocks falling on demand worries, the technology-heavy Nasdaq dropping 1% and the energy sector dropping 3% on falling oil prices. It fell.
Some financial services results showed a positive response, compared to an 8% drop in UnitedHealth shares after the health insurer's 2025 profit forecast fell short of Wall Street expectations. However, financial results were mixed.
Nasdaq was under particular pressure from market powerhouse Nvidia, a leading artificial intelligence chipmaker. Nvidia shares fell 4.7% after hitting a record high at Monday's close and following media reports that the Biden administration is considering restrictions on AI chip exports by U.S. companies.
Chip stocks fell broadly after chip equipment maker ASML Holdings' earnings showed a decline in its 2025 sales outlook. ASML's U.S.-listed shares fell 16%, pushing the Philadelphia Semiconductor Index down 5.3%, the biggest single-day decline since early September.
“There seems to be a lot more stress concentrated on chips. This is putting downward pressure on technology as a sector,” said Kevin Gordon, senior investment strategist at Charles Schwab.
But while Gordon thought the lower-than-expected earnings were an excuse to sell semiconductor stocks, he was encouraged by the Nasdaq's roughly equal number of advancers and decliners.
“It's not a widespread washout,” he said, noting that stocks sold on that day had previously outperformed. “This shows that mega-cap stocks are pushing down the index.”
The energy industry index ended down 3%, the biggest single-day decline since early October 2023, as oil prices fell on lower demand expectations after media reports suggesting Israel would not attack Iranian oil targets. It became the rate.
The Dow Jones Industrial Average fell 324.80 points, or 0.75%, to 42,740.42, the S&P 500 fell 44.59 points, or 0.76%, to 5,815.26, and the Nasdaq Composite Index fell 187.10 points, or 1.01%, to 18,315.59.
Notably, both the Dow and S&P 500 posted record closing prices in the previous session.
After energy, the S&P 500 technology index was the biggest decliner, falling 1.8%.
However, defensive sectors outperformed, with real estate gaining the most by 1.2%, followed by consumer staples by 0.6% and utilities by 0.5%.
In the financial sector, Bank of America shares rose 0.5% after beating third-quarter profits, while Charles Schwab shares rose 6%, beating expectations.
But while debt underwriting supported the investment banking unit's results, Citigroup shares fell 5% after the bank reported mixed results, with lower net income and lower-than-expected net interest income.
Bucking the trend of declines in tech stocks, Apple ended up 1.1% after hitting an all-time high earlier.
Walgreens Boots Alliance shares rose to 15.8 after the company announced fourth-quarter adjusted earnings that narrowly beat Wall Street's lower expectations and announced plans to close 1,200 stores to cut costs. % rose.
Investors will be watching the upcoming earnings report in the coming days, as well as key economic data such as monthly retail sales and industrial production data.
San Francisco Fed President Mary Daly said early Tuesday afternoon that policymakers were still working to rein in inflation after September's interest rate cut.
Traders are pricing in about a 98% chance that the Fed will cut interest rates by 25 basis points in November, according to CME's FedWatch.
Declining issues outnumbered advancing issues on the New York Stock Exchange by a 1.01-to-1 ratio, with 514 new highs and 41 new lows.
On the Nasdaq, declining issues outnumbered advancing issues by a 1.05-to-1 ratio, with 2,109 advancing issues and 2,214 declining issues.
The S&P 500 Index posted 112 new 52-week highs and no new lows, while the Nasdaq Composite Index posted 173 new highs and 82 new lows.
On U.S. exchanges, 12.85 billion shares were traded, compared to an average of 12.18 billion over the past 20 days.
(Reporting by Sinead Kalu in New York and Lisa Matakkal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai and Matthew Lewis)