Chipmakers, trade fears push stocks lower in early trading

Reader's Pick

NEW YORK: U.S. stocks fell in early trading Friday on Wall Street after a major chipmaker issued a sharp warning about how the US-China trade war is disrupting a key industry.

Technology led the broader market lower at the end of an uneven week of trading. Broadcom warned that demand for chips has slumped because of restrictions on sales to Chinese technology firms and hesitation among customers to place new orders. Broadcom fell the most among chipmakers and Intel, Texas Instruments and Nvidia were also among the heaviest weights on technology stocks.

Financial and industrial stocks were also among the biggest losers. Financial adviser Charles Schwab fell 3.4% and 3M fell 1.3%.

- Advertisement -

Facebook rose 2% and propped up a communications sector heavy with media and internet companies. The social media company is gaining some key backers for its upcoming cryptocurrency, according to media reports.

Utility stocks were among the biggest gainers. That’s normally a sign that investors are worried about economic growth and shifting money into safer holdings. Consumer staples, also considered less risky, swayed between small gains and losses.

In another sign investors are seeking safer holdings, bond yields fell slightly to 2.08% from 2.09% Thursday.

The week has been full of uneven trading and swings between safe-play and risky holdings. Stocks opened strong on Monday, then spent the rest of the week seesawing as investors searched for direction amid lingering trade dispute tensions. A suspected attack on two oil tankers in the Strait of Hormuz also threw more uncertainty into the market.

Despite the volatile week, both the S&P 500 and Nasdaq are poised to eke out slight gains for the week. Every major index is still up more than 4% so far this month.

- Advertisement -

The market is also looking ahead to next week’s meeting of policyholders of the U.S. Federal Reserve. Last week, Fed Chair Jerome Powell set off a market rally after he signaled that the central bank is willing to cut interest rates to help stabilize the economy if the trade war between Washington and Beijing starts to reduce growth.

KEEPING SCORE: The S&P 500 index fell 0.3% as of 10:25 a.m. Eastern time. The Dow Jones Industrial Average fell 48 points, or 0.2%, to 26,058. The Nasdaq composite fell 0.5%.

STALE CHIPS: Broadcom fell 6.7% and dragged its fellow chipmakers lower after warning that restrictions on sales to China will crimp demand.

The restrictions are mostly aimed at Chinese phone maker Huawei. The U.S. has called the company a national security threat. But, the company controls much of the phone market in China and U.S. chipmakers rely on it and the supply chain it involves for a significant portion of revenue.

Broadcom, which gets about half its revenue from China, shaved $2 billion from its full year revenue forecast. It cited export restrictions on one of its “largest customers” and said other customers have cut inventory levels.

Texas Instruments also gets nearly half its revenue from China, and it shed 3.4%. Qualcomm, which gets more than half its revenue from China, fell 2.1%.

- Advertisement -

Read latest Business News and Startup news on TechGraph. Watch live and latest news on TechGraph TV. Follow us on Facebook or follow us on Twitter and Instagram. Listen audio news from TechGraph Briefings on Spotify, Google Podcast, Amazon Music & on Apple Podcast.
 

Krishna Mali
Krishna Mali
Founder & Editor of TechGraph.

Latest News

Promoted Links

Related Stories

Bank of Japan keeps monetary policy steady, brings new forward guidance on rates

The Bank of Japan kept its monetary policy steady on Thursday but introduced new...

Employees union seeks FIR against Jet Airways boss Naresh Goyal, Vinay Dube and on SBI Chairman

The employee union of Jet Airways, which is facing its worst crisis, Friday sought...

Japan approves 26 trillion yen as economic stimulus package to combat overseas risks

Japan's cabinet approved an economic stimulus package worth 26 trillion yen ($239 billion) with...

Samsung Electronics asks its shareholders to use electronic voting for upcoming AGM

Technology giant Samsung Electronics has adopted electronic voting for the first time ever for...

Rahul Gandhi hits on RCEP says, ‘Make in India’ has become ‘Buy from China’

Asserting that "Make in India" has become "Buy from China," Congress leader Rahul Gandhi...

CASHe launches WhatsApp-based instant credit line services

India-based credit-led Ai-driven fintech platform, CASHe has announced the launch of Ai-powered chat capability...

Yandex launches AR short video App ‘Sloy,’ for fashion and lifestyle bloggers and brands

In an attempt to engage the local audience and bloggers, Russian search engine giant...

Budget 2022-23: Banking, NEO Bank & NBFC Sector Expectations

Banking, Neo Bank & NBFCs sector expectations from Budget 2022: As Union Finance Minister...

The AP Playbook for Building Solid Supplier Relationships

Accounts Payable (AP) departments can play a crucial role in forging strategic alignment between...

Ampere Electric to setup e-mobility manufacturing plant in Tamil Nadu

Electric Mobility Company Ampere Electric has announced a phased investment potential of Rs 700...

Adtech startup ExperientalEtc raises $200K from StartupLanes

Mumbai-based Adtech startup, ExperientalEtc has raised $200K in series seed round funding led by...

How to choose top payout casinos online

Each casino sets its conditions for the withdrawal of winnings. However, all gambling clubs...

Strengthening India’s Digital Learning Infrastructure

The pandemic gave education technology an unparalleled boost. This has led to the unprecedented...

InPrime FinServ snaps $1.45 Mn from InfoEdge Ventures, Titan Capital & Others

Bangalore-based fintech startup, InPrime FinServ has raised $1.45 million in series seed round funding...