Chipmakers experience significant decline due to concerns about US restrictions on chip sales to China.

From Yahoo Finance: 2024-07-17 15:29:42

The world’s largest technology companies took a hit due to concerns about tighter US restrictions on chip sales to China, leading to a broad selloff in the industry that has been driving the stock market. Chipmakers like Nvidia, Advanced Micro Devices, and Broadcom saw a significant decline, dragging down semiconductor indexes worldwide.

The Biden administration is contemplating severe restrictions on companies like Tokyo Electron and ASML if they continue to provide advanced semiconductor technology to China. Possible sanctions on specific Chinese chip firms connected to Huawei Technologies Co. are also being considered. This news caused stocks to drop, with the S&P 500 and Nasdaq 100 experiencing losses.

A pair of chipmakers, Intel Corp. and Globalfoundries Inc., managed to resist the selloff, with the Dow Jones Industrial Average setting another record high. Financial shares outperformed as U.S. Bancorp experienced a surge in stock value. The Federal Reserve reported slight economic growth and cooling inflation in its Beige Book.

Goldman Sachs Group Inc.’s Scott Rubner believes the S&P 500 has hit a peak and has nowhere to go but down. He points to historical data showing poor returns following July 17 as evidence. Jonathan Krinsky at BTIG states that market sentiment is overly complacent, and a correction may be imminent.

Key events happening this week include the ECB rate decision, US jobless claims, Philadelphia Fed manufacturing data, and speeches from various Fed officials. Stock indices like the S&P 500 and Nasdaq 100 experienced declines, while the Dow Jones Industrial Average rose slightly. Major cryptocurrencies like Bitcoin and Ether saw mixed movements, and bonds and commodities had varied results.

©2024 Bloomberg L.P.



Read more at Yahoo Finance: High-Flying Chipmakers See Worst Plunge Since 2020: Markets Wrap