US stocks slump, with tech heavyweights cratering on fresh semiconductor export restrictions
US stocks slid, with tech leading the way down as chipmakers face additional curbs on what they can sell to China. Major indexes extended losses after Fed Chair Jerome Powell reiterated the message that the central bank is in no hurry to respond to the hit to growth from tariffs because these levies will also put upward pressure on inflation.
The S&P 500 ended down 2.2%, the Nasdaq 100 fell 3%, and the Russell 2000 gave back 1%.
Tech was the worst-performing S&P 500 sector ETF, with all besides energy finishing in the red.
After the close on Tuesday, Nvidia said it was taking a $5.5 billion charge in its upcoming earnings report because the chip designer is no longer allowed to sell its H20 chips to China. Shares tumbled on the news, with analysts rushing to figure out how much these exports restrictions will dent earnings. That wasn’t the only bad news for semis on the day, as Dutch chip equipment manufacturer ASML slumped on lower-than-expected sales and orders.
Elsewhere in pain for Magnificent 7 stocks, Apple gave back all of the gains it made following the tariff exemptions announced Friday after the close, while Tesla slumped hard on a string of bad news.
United Airlines initially soared after reporting better-than-expected earnings after the close on Tuesday, but gave back that advance to finish flat. The airline provided two sets of guidance, and the numbers for the recessionary scenario look very optimistic relative to history.
Car rental company Hertz was a standout performer, spiking more than 50% after Pershing Square, run by Bill Ackman, revealed a 4% position in the stock.
