US stocks: Nasdaq ends down as chipmakers fall and bank earnings roll in
In a recent trading session, the Nasdaq index took a hit as chip stocks continued their downward spiral, amid diverging results from major banks like Citigroup and Goldman Sachs. The PHLX chip index faced a substantial decline, sparking fears surrounding competition in this sector. Despite the turbulence, analysts express optimism about future earnings linked to AI-driven innovations.
The Nasdaq Composite closed lower on Tuesday as chip stocks continued to decline and investors analyzed mixed quarterly earnings from major US banks such as Citigroup. The PHLX chip index slipped for an eighth consecutive day, following Broadcom CEO Hock Tan's comments on Monday regarding excessive investment in the sector. Reports of technological advances by Chinese memory chip company CXMT heightened concerns about increasing competition. Micron Technology and Applied Materials both experienced sharp drops, while Broadcom shares rose.
Citigroup and Goldman Sachs both reported earnings that surpassed profit estimates, with the latter climbing while the former slipped. Wells Fargo fell after its net interest income fell short of expectations, and JPMorgan Chase exhibited mixed results after missing a profit target. Apple reached a record high intraday during the session.
Analysts anticipate that S&P 500 third-quarter earnings will surge more than 30%, primarily driven by AI-related technology companies, according to LSEG data. Despite these expectations, analysts see a strong earnings season offsetting concerns surrounding the US conflict with Iran, rising bond yields, and inflation due to high oil prices.
The S&P 500 closed at 7,805.83 points, a 0.02% decrease, while the Nasdaq Composite fell 0.15%, ending at 27,203.53. The Dow Jones Industrial Average dropped 173.10 points, or 0.33%, to 51,677.45.
The S&P 500 has risen approximately 14% in 2026, propelled by AI-related technology stocks. However, the median stock in the index has only climbed less than 5%, and over 200 S&P 500 components have declined for the year. The PHLX chip index has lost over 8% in the past five sessions, although it remains up over 70% for the year.
The S&P 500 healthcare index declined on Tuesday, with Johnson & Johnson slipping despite exceeding profit expectations. Bumble surged following its decision to go private for $1.3 billion, and Domino's Pizza declined after reducing its full-year sales outlook.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
