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.