Traders on the NYSE floor, August 1, 2022.
Source: NYSE
S&P 500 futures fell on Tuesday after another chipmaker warned of tough times following Nvidia’s poor forecast in the previous session.
S&P 500 futures lost 0.3% as chip stocks fell in premarket. Nasdaq 100 futures fell 0.7%. Dow Jones Industrial Average futures were little changed.
Memory chipmaker Micron warned that revenue may be below its previous guidance due to “macroeconomic factors and supply chain constraints.”
It’s been a rough week for chipmakers. Weaker-than-expected revenue guidance from Nvidia weighed on the group on Monday. Nvidia was lower again in premarket trading on Tuesday, losing another 3% after a 6% drop on Monday. The iShares Semiconductor ETF lost 1.5% in premarket trading on Tuesday after falling 1.5% on Monday.
In regular trading Monday, the S&P 500 fell 0.12% and the Nasdaq Composite fell 0.1%. The stock had opened the session higher, but then gave up most of those gains before the closing bell on Monday.
Outside of chips, a couple of Nasdaq-listed stocks were also taking early hits. Novavax fell 32% in premarket trading after it cut full-year revenue guidance due to weak demand for its Covid vaccines. Upstart fell 13% in premarket trade after the consumer loan company reported second-quarter results that missed expectations for profit and revenue.
With the S&P 500 heading into its third consecutive positive week, investors are wondering if this comeback is just a bear market bounce and the start of a new sustained advance.
“I think it’s likely to be tested again and investors should be careful to buy here,” Morgan Stanley Wealth Management’s Jim Lacamp said on CNBC’s “Closing Bell” on Monday. “You should use a rally like this to sell some things you’re trying to get rid of; you know, you don’t want the cheese anymore, you want out of the trap.”
On the economic front, investors await the latest reading of the July consumer price index, due on Wednesday, for some clarity on the path of Federal Reserve interest rate hikes as works to curb inflation, or at least slow it down.