October 7, 2022

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Stock futures drop after the first trading day in August

S&P 500 and Nasdaq futures fell on Tuesday with chip stocks lower

Traders on the floor of the New York Stock Exchange, August 1, 2022.

Source: NYSE

S&P 500 futures fell on Tuesday after another chip maker warned of tough times ahead after Nvidia’s weak outlook in the previous session.

S&P 500 futures lost 0.3% as chip stocks fell in the primary market. Nasdaq 100 futures were down 0.7%. Dow Jones Industrial Average futures were little changed.

micron memory chip It warned that revenue may not meet its previous guidance Because of “macroeconomic factors and supply chain constraints”. The stock is down nearly 4% in early trading.

It’s been a tough week for the chipmakers. On Monday, weaker-than-expected revenue guidance from Nvidia weighed on the group. Nvidia slipped again in pre-market trading on Tuesday, shedding another 3% after dropping 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 risen for three straight weeks, but earnings season has shown warnings about demand from top corporate executives. Investors are watching closely to determine how the Fed’s fight against inflation is unfolding in the economy.

“In our view, a rate hike by the Fed is impacting the economy. We believe that tightening is just beginning to have a broad impact on the economy, and a bearish base case in the medium term,” Wolf Research’s Chris Senek said in a note. still standing.” to customers on Tuesday.

Outside the chips, a pair of Nasdaq-listed stocks also took early hits. Novavax shares fell 32%. In pre-market trading after the full-year revenue guidance was cut due to weak demand for Covid vaccines. Upstart fell 13% in pre-market trading after the consumer lender reported second-quarter results that missed earnings and revenue expectations.

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On the economic front, investors are waiting for the latest CPI reading for July, due on Wednesday, to find some clarity on the path of interest rate hikes by the Federal Reserve as it works to eliminate, or at least slow, inflation.