Traders on the NYSE floor on August 1, 2022.
S&P 500 futures fell on Tuesday after another chipmaker warned of tough times ahead following Nvidia’s dire forecast in the previous session.
S&P 500 futures lost 0.3% as chip stocks fell in the premarket. Nasdaq 100 futures fell 0.7%. Dow Jones Industrial Average futures were little changed.
Memory chipmaker Micron It warned that revenue could fall short of its prior guidance Because of “macroeconomic factors and supply chain constraints.” The stock fell nearly 4% in early trade.
It’s been a tough week for chipmakers. On Monday, weaker-than-expected earnings guidance from Nvidia weighed on the group. Nvidia fell again in premarket trading on Tuesday, falling another 3% after a 6% decline on Monday. The iShares Semiconductor ETF lost 1.5% in premarket trading on Tuesday after falling 1.5% on Monday.
During regular trading on Monday, the S&P 500 fell 0.12% and the Nasdaq Composite fell 0.1%. Shares opened the session higher, but gave up most of those gains before the closing hours on Monday.
Outside of chips, a pair of Nasdaq-listed stocks also took early hits. Novavax fell 32% In pre-market trading after cutting full-year revenue guidance due to weak demand for Covid vaccines. The upstart fell 13% in premarket trading after the consumer lender reported second-quarter results that missed both profit and revenue expectations.
With the S&P 500 coming off its third consecutive positive week, investors are wondering if this comeback could be a bear market bounce and the start of a new sustained uptrend.
“I think there’s room for a retest, and investors should be careful buying here,” Morgan Stanley Wealth Management’s Jim LaCamp said on CNBC’s “Closing Bell” on Monday. “You have to use a rally like this to sell some of the things that you’re trying to get rid of — you know, you don’t want cheese anymore, you have to get out of the trap.”
On the economic front, investors await the latest reading of the July consumer price index due on Wednesday to find some clarity on the path of Federal Reserve interest rate hikes in an effort to contain or at least slow inflation.