Chip stocks fell across global markets on Tuesday after Samsung Electronics stock dropped nearly 7% in South Korea, dragging the Nasdaq $NDAQ-100 lower even as the Dow pointed to modest gains following its first-ever close above 53,000.
Samsung stock fell nearly 7% in South Korea despite a 19-fold surge in quarterly operating profit, dragging tech indexes lower worldwide
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Chip stocks fell across global markets on Tuesday after Samsung Electronics stock dropped nearly 7% in South Korea, dragging the Nasdaq $NDAQ-100 lower even as the Dow pointed to modest gains following its first-ever close above 53,000.
A forecast of a 19-fold jump in second-quarter operating profit wasn't sufficient to satisfy what The Wall Street Journal described as investors' lofty expectations for Samsung. South Korea's Kospi index fell nearly 5% in the wake of the results. Among U.S. chipmakers feeling the pressure in pre-market trading, Micron $MU dropped 5%, and losses extended to KLA, Marvell Technology, Nvidia $NVDA, Broadcom $AVGO, and AMD $AMD. Nasdaq-100 futures fell about 1%, while S&P 500 futures lost 0.1%. Dow futures edged up 0.2%.
"The reaction to Samsung speaks to one of the biggest risks facing markets over the coming weeks: second-quarter earnings results are likely to be quite robust on an absolute basis ... but unlike with the first-quarter season, expectations are presently very bullish," Adam Crisafulli of Vital Knowledge wrote in a note, according to CNBC.
An attack by Iran's Revolutionary Guard on two commercial ships near the Strait of Hormuz pushed energy prices upward Tuesday morning, The Journal reported. Oil benchmarks responded to the news, with Brent crude up roughly 1% and approaching the $73-a-barrel mark. Natural gas prices in Europe moved higher as well.
Tuesday's moves follow a strong Monday session on Wall Street. Monday's rally saw the Dow cross above 53,000 for the first time in history and close there. A broad-based recovery in semiconductor stocks helped the Nasdaq Composite gain more than 1%, while the S&P 500 rose 0.7%.
Shares of SpaceX, set to join the Nasdaq-100 on Tuesday, were trading about 2% lower before the opening bell. Investors will also watch for U.S. trade deficit data due Tuesday morning.
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