Tech โคStocks Dip following Mixed Earnings Reports and Trade Developments
U.S.stock indexes โdeclined following a โwave of quarterly โearnings reports from majorโข tech companies and developments in U.S.-Chinaโ trade relations.โฃ The Nasdaq Composite experienced particular pressureโ as โคshares โof Meta โand Microsoft fell sharply, offsetting gains from Alphabet and other sectors.
The โweek’s firstโฃ majorโฃ tech earnings reports delivered a mixed bagโ for investors. Alphabet’s โขshare price rose 3% following a strong report, whileโข Meta andโ Microsoft sharesโค fell 11% andโข 3%, respectively, asโฃ concerns mounted over โrising โฃcost forecasts at bothโค companies. The downturn โin Meta and Microsoft โคcontributed to a broader rotation away from tech stocks,withโฃ Nvidia also facing selling pressure. Conversely,bank stocks like JPMorgan and Bank of โคAmerica,along withโ healthcare stocks such as Eli Lilly,saw gains; Eli Lilly’s stock โขincreased 4% after announcing better-than-expectedโค quarterly results and raising its forecast.
Adding to market dynamics, former President Trumpโข agreed toโข cut tariffsโ on fentanyl from China to 10%, reducing the total duty on Chinese imports from 57% to 47%.As part of โฃthe agreement, Beijingโ committed to curbing U.S. imports of fentanyl and increasingโ purchases of American agricultural commodities, โincluding โคsoybeans.โ China also announced aโค one-year delay to its previouslyโ planned rare-earthโค exportโ ban.
Though, key issues remain unresolved, including restrictions on nvidia’s chip exports and the โคpotential sale of TikTok’s U.S. assets. China’s Ministry of Commerce stated its willingness to collaborate with the U.S. to “resolve โฃissues related โฃto TikTok,” but provided no further details.
“Things are by no means โover,” said Jed โEllerbrook, portfolio manager at Argent Capital Management. “Trump-related tradeโ volatilityโฃ will remainโข a feature ofโ our capital markets as long โas he is president. That’s my guess, and yesterday’s result confirms it.”โค Ellerbrook also noted โthat semiconductors are currently “the ball being bounced” between the U.S. and China, withโข chipmakers likeโฃ Broadcom and AMD also experiencing โฃpressure.