US chipmakers, technology giants see declines amid global market uncertainty
Date
8/28/2024 4:33:38 AM
(MENAFN) On Monday, shares of US-based chipmakers and technology giants experienced declines, leading to a cautious sentiment among investors amid a mixed performance in global markets on Tuesday. Nvidia, a major player in the chipmaking and AI sectors, saw its stock fall by 2.3 percent ahead of its anticipated financial results due on Wednesday. Other semiconductor companies also faced losses, with Broadcom and Qualcomm experiencing declines of 4 percent and 2.3 percent, respectively. Similarly, Micron's shares dropped by 3.8 percent, while Intel's decreased by 2 percent. Major tech firms, including Microsoft, Meta Platforms, and Amazon, saw their shares fall by around 1 percent, and Tesla experienced a notable 3.5 percent decline.
Despite the Federal Reserve Chairman Jerome Powell's recent indication of potential rate cuts, uncertainties surrounding the central bank's future policy decisions persist. The market anticipates that the Fed will reduce interest rates by 100 basis points by year-end, with strong speculation for a 50-basis-point cut in November. Fed officials noted that while companies are currently showing cautious hiring and firing practices, these trends may be temporary, and it is premature to determine the precise extent of future rate cuts.
In response to these economic signals, the US 10-year Treasury bond yield rose to 3.82 percent on Monday, and the US Dollar Index increased by 0.2 percent to 100.9. The price of gold fell 0.2 percent to USD2,513 on Tuesday, following a record high of USD2,518 the previous day. Conversely, Brent crude oil continued its upward trajectory for the fourth consecutive day, trading at USD80.2 per barrel. On the equity front, the Dow Jones Industrial Average closed at a record high, while the S&P 500 and Nasdaq Composite indices fell by 0.32 percent and 0.85 percent, respectively.
European stock markets exhibited mixed performances on Monday. Data revealed that the German economy contracted by 0.1 percent quarter-on-quarter, though the annual rate of change remained stable. Anticipation of at least two interest rate cuts by the European Central Bank (ECB) by year-end, following the Fed's potential moves, influenced market sentiment. The DAX 40 Index in Germany fell by 0.09 percent, the FTSE MIB in Italy decreased by 0.13 percent, while the CAC 40 Index in France rose by 0.18 percent. European index futures began Tuesday on a mixed note.
In Asia, the negative impact of falling US tech stocks was felt across the region, with a generally mixed market trend. The Nikkei 225 in Japan and the Hang Seng Index in Hong Kong increased by 0.5 percent and 0.1 percent, respectively, while the Kospi in South Korea and the Shanghai Composite Index in China declined by 0.3 percent. Meanwhile, Türkiye’s BIST 100 index experienced a decline, closing at 9,565.76 points, down 1.06 percent from the previous close, reflecting a sales-heavy course.
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