Stocks Fall as Chip Slump Overshadows Oil Drop: Markets Wrap
(Bloomberg) — Stocks fell as a deepening rout in chipmakers eclipsed gains in sectors that received a boost from lower oil prices and declining bond yields.
Nasdaq 100 futures slid 0.8%, leaving the index set for a five-day run of losses for only the second time this year. S&P 500 contracts were down 0.1%. Asia’s benchmark headed for a correction after SK Hynix Inc. and Samsung Electronics Co. tumbled more than 13% in Seoul.
In Europe, the Stoxx 600 rose 0.1%. ASML Holding NV extended losses for the week to nearly 10% following the emergence of a possible Chinese state-backed rival. Across the benchmark, advancing stocks outnumbered decliners even as earnings from Barclays Plc, LVMH and Unilever Plc drew a mixed reaction.
While weekslong volatility in chipmakers rumbles on amid fresh concerns over artificial intelligence spending and rising Chinese competition, traders are rotating into consumer stocks and other sectors seen benefiting from a resilient economic outlook.
Appetite has received a further boost from lower crude prices, prompting traders to scale back bets on US interest-rate hikes over the next 12 months. Brent fell for a third straight day, dropping 3.2% to below $86 a barrel after President Donald Trump said that the US and Iran were engaged in talks.
“It’s perfectly legitimate for investors to dilute their positions in semiconductors. It’s a good time indeed to take some profits and diversify,” said Vincent Juvyns at ING Groep NV. “That being said, I advise clients to stay invested as visibility is pretty good for the sector.”
The selloff in chip stocks has raised the stakes ahead of a packed week of risk events, including policy decisions from the Federal Reserve, Bank of Japan and Bank of England, as well as earnings from megacap tech companies. Markets will look for evidence that the biggest spenders on AI can justify the billions of dollars they have poured into the technology.
Corporate News:
Barclays Plc shares dropped the most in more than a year after its second-quarter earnings showed US consumer banking and investment bank growth had not matched up to the pace set by larger American rivals. Unilever Plc’s sales rose more than expected as consumers in key markets including India and Indonesia snapped up its Dove soap and Rexona deodorants. LVMH’s key fashion and leather goods unit, home to Louis Vuitton and Dior, barely eked out sales growth last quarter as the conflict in the Middle East deterred wealthy shoppers. Johnson & Johnson said it agreed to a $5.5 billion commitment to resolve years of litigation related to claims that its talc products caused ovarian cancer. Mercedes-Benz Group AG lowered its full-year guidance, citing weaker demand in China, where a prolonged property slump is undermining consumer sentiment and curbing demand for luxury vehicles. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 9:19 a.m. London time S&P 500 futures fell 0.1% Nasdaq 100 futures fell 0.8% Futures on the Dow Jones Industrial Average rose 0.1% The MSCI Asia Pacific Index fell 3.4% The MSCI Emerging Markets Index fell 3.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1370 The Japanese yen was little changed at 163.81 per dollar The offshore yuan was little changed at 6.7680 per dollar The British pound was little changed at $1.3302 Cryptocurrencies
Bitcoin fell 2.3% to $63,424.08 Ether fell 3.3% to $1,881.49 Bonds
The yield on 10-year Treasuries declined three basis points to 4.62% Germany’s 10-year yield declined two basis points to 3.11% Britain’s 10-year yield declined four basis points to 4.96% Commodities
Brent crude fell 2.8% to $85.86 a barrel Spot gold fell 0.6% to $4,050.18 an ounce This story was produced with the assistance of Bloomberg Automation.
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