Major Wall Street indices fell on Tuesday on concerns over rising US-China tensions ahead of the arrival of US House of Representatives Speaker Nancy Pelosi in Taiwan, with losses in industrial bellweather Caterpillar added to the slide.
Shares of chipmakers with large investments in China fell, while Caterpillar fell 3.6% as slow manufacturing activity in the world’s second-largest economy and a halt in Russia’s operations exacerbated its supply-chain woes.
“Chip stocks are really exposed to Asia. Some of them account for 70% of sales, especially chip equipment companies, so that’s a big deal for them,” said Jack Deegan, chief investment officer at Harbor Advisory.
The latest geopolitical uncertainty comes at a time when financial markets are grappling with the aftermath of the Ukraine war, the energy crisis in Europe, rising inflation and tightening financial conditions.
“Any kind of geopolitical concern could cause traders who gained a lot last week to take a little (profit) off the table.”
The CBOE Volatility Index, also known as Wall Street’s fear gauge, soared 24.31 points, its highest level in nearly a week, and the Philadelphia SE Semiconductor Index fell 1%.
At 10:16 am, the Dow Jones Industrial Average was down 301.47 points, or 0.92%, at 32,496.93, the S&P 500 was down 25.27 points, or 0.61%, at 4,093.36, and the Nasdaq Composite was down 56.02 points, or 0.45. %, at 12,312.95.
Among individual stocks, DuPont de Nemours fell 1.4% after the industrial materials maker cut its full-year outlook, while shares of credit-rating company S&P Global Inc fell 2.6%, beating its 2022 profit forecast.
Uber Technologies Inc jumped 14.1% after the ride-hailing firm reported positive quarterly cash flow for the first time and forecast third-quarter operating profit.
Pinterest Inc. rose 13.3% as active investor Elliott Investment Management became the largest shareholder of the digital pin-board firm.
Meanwhile, data showed US job openings fell more than expected in June, suggesting that demand for labor is beginning to ease, easing pressure on the Federal Reserve to aggressively raise interest rates. It is possible
The US central bank has hiked rates by 2.25 per cent this year and vowed to be data-driven in its outlook for future hikes.
There has been an increase in the number of issues declining to a 1.90-to-1 ratio on the NYSE and to a 1.11-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 30 new lows, while the Nasdaq recorded 21 new highs and 41 new lows.
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