NEW YORK: The S&P 500 and the Nasdaq inched lower on Tuesday as chip stocks came under selling pressure while investors parsed a mixed bag of quarterly results, including those from big US banks.
Healthcare was the biggest drag on the S&P 500, with Johnson & Johnson dropping 6.8 percent despite topping profit estimates.
Information technology stocks were flat in choppy trading. Some chip stocks sold off — with memory chipmaker Micron Technology losing 4.6 percent and data storage companies Western Digital and Seagate slipping between 1 percent and 2 percent. The decline was countered by Apple hitting a record high and Microsoft rising 0.9 percent.
Sentiment turned after Broadcom CEO Hock Tan likened some of the investment flow into the sector to “casino gambling” on Monday. Reports of technological advances by China’s CXMT, meanwhile, raised fears of rising competition.
AI technology weakness was creating unease in the market, said Peter Cardillo, chief market economist at Spartan Capital Securities.
A 2 percent rise in Meta propped up the communication services sector, limiting losses on the S&P 500.
At 12:23 p.m. ET, the Dow Jones Industrial Average fell 173.96 points, or 0.34 percent, to 51,676.77, the S&P 500 lost 9.38 points, or 0.12 percent, to 7,798.04 and the Nasdaq Composite lost 38.24 points, or 0.14 percent, to 27,207.66.
Caterpillar and Honeywell were the biggest drags on the Dow.
Investors also read through a mixed bag of earnings from big banks. Citigroup dipped 3.4 percent but Goldman Sachs rose about 0.5 percent after both topped profit estimates.
Wells Fargo fell 1.5 percent after its net interest income missed estimates, while JPMorgan Chase swung between gains and losses following a rare profit miss.
The flattening yield curve — where longer-term returns rise faster than shorter-term, in a sign of rising credit risks — weighed on banks, Kathleen Brooks, research director at XTB, said. “Investors tend to price this in ahead of time, which is why US banks with large retail units like JPMorgan and Citi are struggling.”
Hopes of a strong earnings season had been propping up the broader market amid geopolitical tension, surging bond yields and energy-price-led inflation worries.
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