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Live Market News: S&P 500 and Nasdaq Composite Tumble
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ASML Continues to Drop
After accidentally publishing its earnings early during trading, ASML (Nasdaq: ASML) continues to plummet. Shares are now down 17% and have weighed down other stocks in the semiconductor industry.
Why are investors selling off ASML at such an aggressive pace today? The company reported lower margins next year and sales that would come in at $30 to $35 billion, well below estimates of $35.94 billion.
The company, which has a monopoly on the most advanced equipment needed to making cutting-edge chips, is facing geopolitical headwinds. Restrictions have limited the company’s sales in China, which is weighing on next year’s forecast.
In addition, it cited weakness from key customers. Those are likely Intel and Samsung. Both companies have been struggling to compete with Taiwan Semiconductor (NYSE: TSM) on leading-edge chip manufacturing.
While ASML is causing a larger sell-off across AI stocks, the reality is its problems are more unique to the company rather than an indictment of AI demand.
Index Losses Accelerate
Losses centered on Nasdaq stocks that have recently rallied are continuing to pick up steam. As of 10:36 a.m. the Nasdq-100 is now down .90%.
Losses accelerated after ASML (Nasdaq: ASML) reported light bookings for the third quarter and guidance for 2025 that is below Wall Street expectations. With ASML reporting disappointing guidance, other semiconductor equipment stocks such as KLA, Lam Research, and Applied Materials are also now seeing deep losses in today’s trading.
S&P 500 to 6,400 By the End of 2025?
UBS strategist Jonath Golub raised his S&P 500 target to 6,400 by the end of 2025. That’s from about 5,852 today.
The S&P 500 now trades above all major Wall Street forecasts made at the beginning of 2024. Whether the S&P 500 can continue its rally depends on whether strong corporate earnings growth materializes next year, and it will also likely hinge on how accommodating the Fed’s interest rate policy is.
Nasdaq Now Negative
As of 10:25 a.m. ET, the Nasdaq has turned negative while the Russell 2000 is now up .33% on the day.
Stocks that have recently rallied and are tied to AI processing revenue (Arm Holdings, Advanced Micro Devices, NVIDIA, Broadcom) continue to post the largest declines in the index.
Shortly after market open indexes are seeing little movement on Tuesday, October 15th. The Nasdaq Composite is seeing the strongest gains while the Dow Jones Industrial Average is seeing losses beyond major indexes.
As of 10:00 a.m. ET we have:
- Nasdaq Composite: Up 42.78% (+.23%)
- S&P 500: Up 2.28 (+.04%)
- Russell 2000: Down 3.31 (-.15%)
- Dow Jones Industrial Average: Down 268.45 (-.62%)
Let’s dive into the major storylines driving the market today.
Earnings Season Starts
Today is the first major day of companies reporting third-quarter earnings. Before the bell there were reports from major companies like:
- UnitedHealth (Down 9.90%)
- Bank of America (Up. 1.80%)
- Citigroup (Down 1.51%)
- Goldman Sachs (Down .03%)
- Johnson & Johnson (Up 1.77%)
- Charles Schwab (Up 7.65%)
And after the bell Interactive Brokers and United Airlines will report.
As you can see, the biggest headline is UnitedHealth (NYSE: UNH) down nearly 10%. The company projected 2025 adjusted profits to be $30 per share, which was well below current expectations of $31.18. Rising medical costs are weighing on the insurer’s profitability.
UnitedHealth is one of the 30 DOW components and is strongly weighted as the DOW is adjusted based on stock price and UnitedHealth’s stock price is the highest in the index. Therefore, UnitedHealth’s almost 10% decline is the primary reason the Dow Jones Industrial Average is underperforming other major indexes today.
Other stocks in the Dow underperforming include Chevron (down 1.92%) and Caterpillar (down .91%).
The top performer in the Dow Jones today is Apple (Nasdaq: AAPL). The company’s stock is up 2.56% in early trading after research notes on Wall Street indicated that demand for the newest iPhone model may be picking up after a lackluster launch.
NVIDIA Takes a Breather
After several weeks of outperformance, shares of NVIDIA (Nasdaq: NVDA) are finally taking a breather. The company’s stock is down 2.93%. Other AI names like AMD (Nasdaq: AMD), ARM Holdings (Nasdaq: ARM), and Broadcom (Nasdaq: AVGO) are also amongst today’s biggest decliners in the Nasdaq.
One notable exception among AI stocks is Marvell Technology (Nasdaq: MRVL), which is one of the leading performer in the Nasdaq-100. Marvell custom designs Trainium chips for Amazon (Nasdaq: AMZN), and that company announced a major deal with Databricks today, leading to increased enthusiasm around the company.
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