Traders work on the trading floor of the New York Stock Exchange on the afternoon of April 9, 2024 in New York City.
Michael M. Santiago | Michael M. SantiagoGetty Images
This report comes from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Nasdaq's worst trading day
this Nasdaq Index Encountered the worst trading day since December 2022, plunged nearly 3% on reports that semiconductors were under pressure from tighter trade restrictions. this S&P 500 Index Stocks also retreated as technology stocks continued to rotate. meta platform plunged 5.7%, while Big Tech peers Netflix and Microsoft The decline exceeds 1% and apple down 2.5%. Going against the trend, Dow Jones Industrial Average It closed above 41,000 points for the first time. Focus on small caps Russell 2000 It fell 1%, ending its five-game winning streak. 10-Year Treasury Bond Yield Ministry of Finance Not much has changed, but US oil prices up 2.6%.
Chip tension
Global chip stocks plunge This comes amid possible tightening of restrictions on U.S. exports to China and rising geopolitical tensions. U.S. listed stocks ASML and British Semiconductor fell 12% and 8% respectively. after falling Bloomberg reports The Biden administration is Weighing tighter restrictions Companies exporting technology to China. Nvidia The stock price fell more than 6% Arm Holdings, Pan-forest research, Applied Materials and Advanced Micro Devices Each fell about 10%. Qualcomm down nearly 9%. this VanEck Semiconductor ETF It fell more than 7%, the largest single-day drop since 2022.
Getting closer
Federal Reserve Board Governor Christopher Waller said Rate cuts could be coming soon, unless there are major surprises in inflation and employment data. “I believe the current data is consistent with achieving a soft landing… While I don't believe we have reached our final destination, I do believe we are getting closer to the point where we will need to cut interest rates,” Waller said. His comments were in line with those of other policymakers suggesting a rate cut at the upcoming Federal Open Market Committee meeting was unlikely, but a cut in September was more likely.
United Airlines soars
United Airlines' Profits soar in second quarter More than 20%, driven by strong international travel demand. However, the airline's third-quarter profit forecast fell short of expectations and now expects profits of $2.75 to $3.25 per share, compared with expectations of $3.44 per share. While the industry as a whole struggles with overcapacity, putting pressure on airfares, United and Delta Airlines Thrive with increased international flights and premium service.
Eli Lilly and Company Slides
RocheThe stock price soared afterwards Positive trial data for its new obesity drugsend competitor stock Eli Lilly and Company, Novo Nordisk Zealand Pharma shares plummeted. The Swiss pharmaceutical giant announced promising early data on its second obesity drug candidate, intensifying competition in the weight-loss market. Roche shares rose 5.8%, Novo Nordisk and Eli Lilly fell 3.8%, and Zealand Pharma fell 8.4%.
(PRO) Two-digit correction
Sam Stovall of CFRA Research believes that despite the recent shift in technology stocks towards small caps, the market is still likely to see a correction. Small-cap stocks rose on positive economic data, while large-cap tech stocks like Nvidia fell. This rotation may not be sufficient to prevent S&P 500 Index sees double-digit correction, Stovall argued.
bottom line
A Bank of America survey of global fund managers conducted from July 5 to 11 showed that “geopolitical conflict” has replaced “rising inflation” as the main investment risk.
The investigation comes against the backdrop of multiple global tensions: France's hung parliament, President Joe Biden facing pressure to resign as the Democratic presidential nominee, Russia's ongoing war in Ukraine, Israel's war in Gaza and strained relations between China and Taiwan.
Trump interviews with Bloomberg His choice of Vice President JD Vance further heightened geopolitical concerns. Trump said that Taiwan “did take about 100% of our chip business. I think Taiwan should pay us for our defense costs.” Questioning the U.S. commitment to Taipei is enough to Taiwan Weighted Index and British Semiconductor plunged on Wednesday.
Trump's victory could be negative for global inflationCNBC’s Karen Gilchrist writes that because his “America First” policies could trigger “More than 60%“A 10% tariff on Chinese imports and a 10% tariff on all U.S. imports. Trump's 2018 Trade war with China costs Americans $195 billion and resulted in the loss of 245,000 jobs.
“Donald is a dealmaker. The president is a dealmaker, He wants to make a deal with China, you know he wants to make a deal. Agreement, and he's working on it. But he'll start tough, and then he'll make a deal. He cares about American business, I know he cares about American business.
Vance strongly opposed aid to Ukraine. “god bless ukraineAs CNBC's Holly Ellyatt writes, here's the reaction from BlueBay Asset Management emerging markets strategist Timothy Ash.
The Biden administration is considering more restrictions on businesses, raising tensions Exporting critical chip manufacturing equipment to China. This news caused the stock prices of ASML, Nvidia, and TSMC to fall sharply.
The combination of these factors heightened market risks, causing the Nasdaq to drop nearly 3% as investors shifted to other sectors. Bank of America warns Retail investors in artificial intelligence stocks could face losses similar to past bubblesand Sam Stovall, chief investment strategist at CFRA Research, warned that even Rotation trades may not protect the S&P 500 from a double-digit correction.
— CNBC’s Jeff Cox, Pia Singh, Alex Harring, Leslie Josephs, Sarah Min, Samantha Subin, Arjun Kharpal and Rebecca Picciotto contributed to this report.