MARKET OVERVIEW. The New York Stock Exchange closed lower on Tuesday, weighed down by the semiconductor and technology sectors as investors took a position ahead of US inflation on Wednesday.
The Toronto Stock Exchange lost more than 90 points on losses in the technology sector.
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX fell 90.87 points (-0.46%) to 19,578.30 points.
In New York, the S&P500 fell 17.59 points (-0.42%) to 4,122.47 points.
the Nasdaq fell 150.53 points (-1.19%) to 12,493.93 points.
the DOW fell 58.13 points (-0.18%) to 32,774.41 points.
the loons closed at $0.0018 (-0.2312%) at $0.7758.
the oil ended down -$0.28 (-0.31%) at $90.48.
L’gold rose $5.40 (+0.30%) to $1,810.60.
the Bitcoin down $882.57 (-3.67%) to $23,169.31.
Despite signing legislation to support more than $50 billion in investments in the semiconductor sector, President Joe Biden blacked out the session after several pessimistic warnings about immediate demand for electronic components.
Micron technology (MU, $59.15, -3.74%) warned that quarterly sales could fall below its guidance. The group expects demand for reminders from its customers to fall due to economic uncertainties, while supply difficulties are disrupting the management of companies’ stocks.
The day before, NVIDIA (NVDA, $170.86, -3.97%)another semiconductor maker specializing in graphics cards also warned that its second quarter would suffer a “significant slowdown in video games.”
These two announcements have affected the entire sector,AMD ($95.54, -4.53%) at Qualcomm (QCOM, $142.51, -3.59%) by the way Intel (INTC, $34.52, -2.43%) and even Amazon (AMZN, $137.83, -1.13%)a big name in cloud, dematerialized computing and a big consumer of microprocessors.
“The law about crisps [puces] which we knew would be signed by the President was already market integrated,” Ventura Wealth Management’s Tom Cahill told AFP. “It was the warnings from Micron and Nvidia that counted.”
“It seems that both the technology sector and the rest of the economy are slowing down,” indicated the analyst, recalling that during the pandemic telework had greatly increased the demand for technological equipment, a momentum that is now increasing .
Another major player in video games is the American publisher Take Two Interactive (Grand Theft Auto), which bought the mobile games developer Zynga at a high price earlier this year, has clearly stalled (TTWO, $120.76, -3.78%) after reporting results that came in well below guidance for the first quarter.
Consumer spending on video games fell 12% year over year in the second quarter of 2022, according to analyst firm Games Market Dynamics.
fear of inflation
Investor concerns ahead of the release of inflation figures for Wednesday’s CPI consumer price index, Thursday’s producer prices and Friday’s consumer confidence index also dampened momentum these past few weeks.
Since the June lows, “the Nasdaq has actually rallied nearly 20% and the S&P 500 has rallied about 15%,” recalls Tom Cahill. “I think today was an opportunity to position yourself ahead of the inflation data and take profits,” he added.
The same goes for analysts at Wells Fargo, who “observed caution among investors waiting for the price index that could determine the Federal Reserve’s monetary policy stance. [Fed]”.
The title of the developer of a vaccine against COVID-19, Novavax (NVAX), listed on the Nasdaq, fell 29.64% to $40.28. The group announced sharply reduced sales prospects for 2022 after the market closed on Monday due to disappointing demand for its vaccine.
Novavax posted a loss of $510 million in the second quarter, compared to a deficit of $352 million a year earlier.
While investors wonder about consumer health amid price hikes, several online retailers have taken a sip Carvana (Cars) (CVNA, $41.43)which lost 10.83% Wayfair (Furniture) (W, $59.61)which fell by 17.04%.
On the bond market, two-year rates remained well above ten-year rates, which were 2.77%.