Wall Street falls on rising US-China tensions; Uber gains post Q2 results
Wall Street’s major indexes fell on Tuesday on concerns over rising U.S.-China tensions ahead of the arrival of U.S. House of Representatives Speaker Nancy Pelosi in Taiwan, with losses in industrial bellwether Caterpillar adding to the slide.
Shares of chipmakers with a large exposure to China fell, while Caterpillar slid 3.6% as slowing construction activity in the world’s second largest economy and a halt in Russia operations added to its supply-chain woes.
“Chip stocks are really exposed to Asia. Some of them have 70% of their sales, especially chip equipment companies, in that region so it’s a big deal for them,” said Jack DeGan, chief investment officer at Harbor Advisory.
The latest geopolitical uncertainty comes at a time when financial markets are struggling to grapple with the fallout of the Ukraine war, an energy crisis in Europe, soaring inflation and tightening of financial conditions.
“Any kind of geopolitical concern can cause traders who gained quite a bit last week to take a little bit (profit) off the table.”
The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 24.31 points, its highest level in nearly a week and the Philadelphia SE semiconductor index fell 1%.
At 10:16 a.m. ET, the Dow Jones Industrial Average was down 301.47 points, or 0.92%, at 32,496.93, the S&P 500 was down 25.27 points, or 0.61%, at 4,093.36, and the Nasdaq Composite was down 56.02 points, or 0.45%, at 12,312.95.
Among individual stocks, DuPont de Nemours fell 1.4% after the industrial materials maker cut full-year outlook, while shares of credit-rating company S&P Global Inc dipped 2.6% on downbeat 2022 profit forecast.
Uber Technologies Inc jumped 14.1% after the ride-hailing firm reported positive quarterly cash flow for the first time ever and forecast upbeat third-quarter operating profit.
Pinterest Inc surged 13.3% as the activist investor Elliott Investment Management become the largest shareholder of the digital pin-board firm.
Meanwhile, data showed U.S. job openings fell more than expected in June, suggesting that labor demand was starting to cool, which could ease the pressure on the Federal Reserve to aggressively raising interest rates.
The U.S. central bank has raised rates by 2.25 percentage points this year and has vowed to be data-driven in its approach toward future hikes.
Declining issues outnumbered advancers for a 1.90-to-1 ratio on the NYSE and for a 1.11-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 30 new lows, while the Nasdaq recorded 21 new highs and 41 new lows.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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