Wall Street's major stock indexes closed lower on Tuesday, with a 1% drop in the technology-heavy Nasdaq leading losses as chip stocks tumbled on demand concerns while the energy sector fell 3% as oil prices dropped.
Market Snapshot
The Dow Jones Industrial Average fell 324.80 points, or 0.75%, to 42,740.42, the S&P 500 lost 44.59 points, or 0.76%, to 5,815.26 and the Nasdaq Composite lost 187.10 points, or 1.01%, to 18,315.59.
Market Movers
ASML Holding, the Dutch manufacturer of equipment used in chip-making, fell 16% after reporting third-quarter earnings and revenue that rose from a year earlier but orders in the period that were well under Wall Street estimates, leading the company to cut sales guidance. The company said: "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness."
Nvidia tumbled 4.7% following the earlier-than-expected release of earnings from ASML. Shares of Nvidia, the semiconductor maker and the leading provider of chips to train artificial-intelligence systems, had risen 2.4% Monday to a record closing high of $138.07. A report from Bloomberg late Monday said U.S. officials were considering capping sales of advanced AI chips to certain countries in the interest of national security.
UnitedHealth Group reported third-quarter adjusted earnings of $7.15 a share, topping analysts' estimates of $7. The healthcare services giant's spending on medical care for members of its insurance plans, however, was higher than expected. UnitedHealth said it paid out 85.2% of medical premiums to cover medical costs, a closely watched metric called the medical loss ratio, or the medical care ratio. Shares dropped 8.1%.
Bank of America rose 0.5%. The bank reported third-quarter earnings of 81 cents a share, topping analysts' estimates of 76 cents. Net income fell by 12% from a year earlier to $6.9 billion but beat forecasts of $6.1 billion.
Goldman Sachs was flat after its third-quarter earnings beat analysts' estimates. Per-share earnings were $8.40, better than forecasts of $6.89. Revenue that investment bankers drove from debt and equity underwriting activity increased significantly from a year earlier.
Shares of Citigroup were down 5.1% after the bank topped third-quarter earnings estimates, getting a lift from gains in trading and investment banking, but reported net interest income of $13.36 billion, lower than expectations of $13.57 billion.
Boeing was up 2.3% after the plane maker filed plans with the Securities and Exchange Commission to raise up to $25 billion in cash through common stock, preferred stock, and debt sales.
Walgreens Boots Alliance rose 16% after the retail pharmacy chain beat quarterly earnings estimates and announced a three-year plan to close 1,200 stores.
U.S.-listed shares of Ericsson jumped 13% after the Swedish telecommunications equipment maker swung to a profit in the third quarter and said sales surged 51% in North America. The company said its expects networks sales to stabilize year over year in the fourth quarter, "driven by continued good growth in North America."
Trump Media & Technology Group, the parent company of former President Donald Trump's Truth Social platform, fell 9.7% following a gain of 18% in the previous session. The stock had been rising as Trump's perceived chances of winning the U.S. presidential election in November have increased.
Wolfspeed surged 21% after the maker of chips for the electric-vehicle industry said it secured new financing and could get even more funding from the U.S. Chips Act.
Enphase Energy was down 9.3% after RBC Capital Markets analysts Christopher Dendrinos and Laura Deng downgraded shares of the solar and battery-system supplier to Sector Perform from Outperform. The analysts believe that the solar company may be on track for slower growth next year that isn't reflected in Wall Street's consensus estimates.
Market News
US Consumers See Higher Long-Run Inflation, Rising Delinquency Risk
Americans said they expected higher inflation over the longer run last month, as their expectations of credit turbulence rose to the highest level since April 2020, the Federal Reserve Bank of New York said in a report on Tuesday.
While inflation a year from now is seen holding steady at 3%, three years from now it is seen at 2.7% from August’s 2.5% estimate, and at 2.9% in five years, from 2.8% in the August survey, the bank said in its latest Survey of Consumer Expectations.
Tesla Lands Key Approval in Germany as It Looks to Ramp up Production
Tesla took a major step forward in Germany when the local environment ministry granted approval for the electric vehicle maker to build a new hall in what will be the first of three stages of expansion. The initiative is aimed at doubling the production capacity at Giga Berlin to 1 million vehicles per year.
The expansion plan includes new infrastructure for storage facilities, a battery cell test lab, and logistics areas. The construction will take place on land Tesla (TSLA) already owns.
Super Micro Computer Announces Nvidia GB200 NVL72, HGX B200 Servers
Super Micro Computer announced new artificial intelligence servers powered by Nvidia's (NASDAQ:NVDA) newest Blackwell line of processors.
The liquid-cooled servers will be powered by NVIDIA GB200 NVL72 and NVIDIA HGX B200 systems, San Jose-based Super Micro said in a statement issued on Tuesday. Super Micro added it has started sampling the new servers to customers, and full-scale production will start late in the fourth quarter.