Wall Street is in decline, weighed down by technology


The New York Stock Exchange was moving hesitantly lower after opening Tuesday, with the technology sector, particularly semiconductors, pulling the market lower.

The Dow Jones index yielded 0.10% and the S&P 500 0.45% while the Nasdaq plunged 1.37%.

During sparse trading on Monday, the Dow Jones index had climbed 0.09% to 32,832.54 points, the Nasdaq had lost 0.10% to 12,644.46 points and the S&P 500 0.12% to 4,140, 06 dots.

“Doomsday warnings from semiconductor makers weigh on technology” at the open, noted analysts at Wells Fargo as investors were also on the lookout for inflation.

On Wednesday, the US Department of Labor is due to release the consumer price index for July and the producer price index for Thursday, which could set the tone for the Federal Reserve’s (Fed) future attitude.

“The market is in hesitation ahead of Wednesday’s Consumer Price Index report, which will shape views on inflation and the potential policy response,” summarized Patrick O’Hare of

Analysts’ projections are betting on a slowdown in price increases to +0.2% over the month compared to +1.3% in June and 9.1% over one year, which could finally suggest that inflation has reached a peak.

On the bond market, yields on Treasury bills were however tending to 2.80% for ten-year rates against 2.75% the day before.

Tuesday the Nasdaq was weighed down by the gloomy outlook disclosed by Micron Technology (-2.40%) which warned that its quarterly revenues could fall below its forecasts.

The group foresees a drop in demand for memories from its customers due to economic uncertainties, while the continuing supply difficulties are disrupting the management of companies’ inventories.

At the same time, the American memory and semiconductor manufacturer based in Boise (Idaho) announced plans to invest $40 billion in factories in the United States by 2030. These investments are part of a plan already announced last year by the company of 150 billion financings in the world.

These announcements come as President Joe Biden will sign the “Chips” law on Tuesday intended to provide subsidies to revive the production of semiconductors in the United States by freeing up fifty billion dollars.

The Nasdaq, with strong technological coloring, also suffered the backlash of the poor outlook for Nvidia, another semiconductor manufacturer specializing in graphics cards in particular. Nvidia warned the day before that its second quarter would suffer a “significant slowdown on the side of video games”.

Another major player in video games, the American publisher Take-Two Interactive (Grand Theft Auto), which at the beginning of the year bought out the developer of mobile games Zynga at a high price, was clearly faltering (-4.58% ) after announcing results well below forecasts for its first quarter.

A good half of the eleven S&P sectors were in the red, with discretionary consumer spending (-1.75%) and information technology (-1.30%) lagging behind.

The energy sector, for its part, pranced in the lead (+2.32%) while oil prices, which had started falling, started to rise again on the news that Russian oil deliveries via Ukraine were interrupted. Chevron, ExxonMobil gained more than 2%.

The title of the developer of a vaccine against Covid-19, Novavax, listed on the Nasdaq, fell 30% to 39.66 dollars. The group announced Monday after the closing, sharply reduced sales prospects for 2022 due to disappointing demand for its vaccine.

Novavax posted a loss of $510 million in the second quarter, compared to a deficit of $352 million a year earlier.

© 2022 AFP

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