Tuesday August 9th


S&P 500, Nasdaq futures fall on Tuesday as chip stocks decline

U.S. stock index futures fell on Tuesday after another chipmaker warned about tough times ahead following Nvidia’s poor forecast in the prior session. S&P 500 futures lost 0.3% as chip shares declined in the premarket. Nasdaq 100 futures fell 0.7%. Dow Jones Industrial Average futures were little changed. Memory chipmaker Micron warned that revenue may fall short of its prior guidance because of ’macroeconomic factors and supply chain constraints.” The stock fell nearly 4% in early trading. It’s been a rough week for chipmakers. On Monday, weaker-than-expected revenue guidance from Nvidia weighed on the group. Nvidia was lower again in premarket trading Tuesday, shedding another 3% after a 6% decline on Monday. The iShares Semiconductor ETF lost 1.5% in premarket trading Tuesday after falling 1.5% on Monday. The S&P 500 has climbed for three straight weeks, but earnings season has featured demand warnings from executives of major companies. Investors are watching closely to determine how the Federal Reserve’s fight against inflation is rippling through the economy. “In our view, Fed rate hikes are impacting the economy on cue. We believe that tightening has just started to broadly hit the economy, and that our intermediate-term bearish base case remains intact,” Chris Senyek of Wolfe Research said in a note to clients on Tuesday. Outside of chips, a pair of Nasdaq-listed stocks were also taking early hits. Novavax slumped 32% in premarket trading after slashing full-year revenue guidance because of poor demand for its Covid vaccines. Upstart declined 13% in premarket trading after the consumer lending company reported second quarter results that missed both profit and revenue expectations. Productivity declined and labor costs jumped in the second quarter, the Labor Department said Tuesday. Nonfarm productivity fell at an annual rate of 4.6% during the second quarter, slightly better than the 5.0% decline expected. Unit labor costs grew at annualized rate of 10.8%, which was higher than the 9.5% expected. Labor costs are now up 9.5% over the past four quarters, which is the biggest four-quarter increase since 1982. The decline in productivity and the jump in labor costs were both smaller than revised numbers of -7.4% and 12.7%, respectively. Shares in the Asia-Pacific were mixed Tuesday on a quiet data day as markets continue to digest last week’s stellar U.S. jobs report. The Nikkei 225 in Japan fell 0.88% to close at 27,999.96 and the Topix index was down 0.74% to 1,937.02. South Korea’s Kospi closed about 0.42% higher at 2,503.46, while the Kosdaq gained 0.34% to 833.65. In Australia, the S&P/ASX 200 rose 0.13% to 7,029.8. Hong Kong’s Hang Seng index gave up earlier gains to trade 0.3% lower in the final hour of the session, while heavyweight Alibaba climbed about 0.7%. Mainland China markets advanced. The Shanghai Composite gained 0.32% to 3,247.43 and the Shenzhen Component added 0.235% to 12,331.09. Oil prices reversed early losses and traded higher on Tuesday despite the latest progress in last-ditch talks to revive the 2015 Iran nuclear accord, which would clear the way to boost its crude exports in a tight market. Brent crude futures added 1.15% to trade at $97.76 per barrel. U.S. West Texas Intermediate crude futures stood at $91.66, for a gain of 1%, after climbing 2% in the previous session. Gold consolidated in a narrow range on Tuesday, buoyed by a softer dollar but held back as investors refrained from big bets until the release this week of U.S. inflation data expected to influence the pace of interest rate hikes. Spot gold was little changed at $1,790.37 per ounce. U.S. gold futures rose 0.1% to $1,807.60. Investors are likely to sit tight until the release of U.S. inflation data on Wednesday with prices likely to remain in a $1,765-$1,795 range, Ricardo Evangelista, senior analyst at ActivTrades, said.