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S&P 500 Falls on Chip Drag Ahead of U.S. Inflation Report

Stock Markets Aug 09, 2022 03:50PM ET
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By Yasin Ebrahim

Investing.com -- The S&P 500 fell Tuesday, as a plunge in chip stocks pressured tech for the second-straight day following a profit warning from chipmaker Micron.

The S&P 500 fell 0.47%, the Dow Jones Industrial Average fell 0.23%, or 77 points, the Nasdaq was down 1.2%.

Micron Technology (NASDAQ:MU) forecast negative free cash flow for the second-quarter, driven by a fall in revenue as weaker PC and video game sales is expected to weigh on chip demand. Its shares fell more than 4%.

The warning from Micron came just a day after Nvidia (NASDAQ:NVDA) also warned on performance and triggered a sea of red across chip stocks, dragging the broader tech sector deep into the red.

Consumer discretionary stocks were on the backfoot weighed down by plunge in cruise companies and retailers following weaker than expected results.

Norwegian Cruise Line (NYSE:NCLH) reported second-quarter results that missed Wall Street’s expectations and delivered gloom guidance, forecasting that occupancy levels aren’t expected to return to pre-pandemic levels until next year.

Royal Caribbean Cruises (NYSE:RCL), and Carnival (NYSE:CCL) were down more than 5%.

Ralph Lauren (NYSE:RL) fell more than 4% after the luxury retailer after reporting fiscal first quarter results that topped analysts’ estimates, but warning that a strong dollar will prove a drag on revenue growth in 2023.

Signet Jewelers (NYSE:SIG) fell even deeper into the red, down about 12%, after slashing its second-quarter and full-year guidance on weaker than expected July sales as red-hot inflation continues to put the squeeze on consumers.

Allbirds (NASDAQ:BIRD) also cut guidance after flagging a slowdown in consumer spending, sending its shares more than 19% lower.

Energy stocks, meanwhile, bucked the broader trend lower even as oil prices pared gains on fresh hopes for a breakthrough on US-Iran talks to revive the 2015 Iran nuclear deal that would pave the way to bring much-needed barrels to the market.

ONEOK (NYSE:OKE), Marathon Petroleum (NYSE:MPC), and Occidental Petroleum Corporation (NYSE:OXY) were among the biggest gainers with the latter supported news that Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) increased its stake in the oil giant to over 20%.

The two-day wobble in stocks come just a day ahead of July’s inflation report, which many believe could show inflation peaking, and dissuade the Federal Reserve from stepping up the pace of monetary policy tightening.

Economists are forecasting that the pace of inflation slowed to 8.7% in the 12-months through July from 9.1% in February.

S&P 500 Falls on Chip Drag Ahead of U.S. Inflation Report
 

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Comments (9)
Mitchel Pioneer
Mitchel Pioneer Aug 09, 2022 4:14PM ET
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Another mitigated loss in the laughingstock of the investing world.  The US Ponzi Scheme can walk a 700 point tightrope on nothing, but can't lose 100 points on a continuing flow of poor data.  Greatest financial FRAUD in history, operating in broad daylight as it DEFRADS America for the world to witness.
jason xx
jason xx Aug 09, 2022 4:02PM ET
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Chip companies are involved in a conspiracy to lower share prices now that the chips act is signed.
animus advertere
animus advertere Aug 09, 2022 4:01PM ET
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Only 8.7% predicted! Definitely going to new highs first thing tomorrow.
soho electronics
soho electronics Aug 09, 2022 3:26PM ET
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better believe it. last minutes and the market ends positive
Ac Tektrader
Ac Tektrader Aug 09, 2022 3:03PM ET
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mitch you just missed out on a rally that could have been a real boon to your bank account . too bad....now this ralley may be ending soon and what do you have show for it.....
Mitchel Pioneer
Mitchel Pioneer Aug 09, 2022 2:55PM ET
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Fears magically subside, and the predictable, criminal miracle "in late trade" commences in the BIGGEST INVESTMENT JOKE IN THE WORLD.  More losses out of the system, as the flagrant FRAUD continues.
Kerry Ditto
Kerry Ditto Aug 09, 2022 2:48PM ET
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AAPL and MSFT are up today. Why? It might be due to their smart buybacks, since they are two of the smartest companies.
Casador Del Oso
Casador Del Oso Aug 09, 2022 2:48PM ET
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Nothing to do with the upcoming excise tax on buybacks.
Kerry Ditto
Kerry Ditto Aug 09, 2022 2:45PM ET
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CPI July forecast is 8.7% vs. June 9.1%. That is whopping 0.4% lower than the June. The actual might be even lower. If so, market will celebrate.
Kerry Ditto
Kerry Ditto Aug 09, 2022 2:39PM ET
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This beaten down low prices will prompt many companies to buy back their own shares particularly beating the clock before hitting 1% tax charge when IRA bill becomes effective. Huge stock market rally is ahead.
Ac Tektrader
Ac Tektrader Aug 09, 2022 2:39PM ET
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it will depend on how much each company has on its balance sheet...
 
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