U.S. stock futures displayed mixed performance in early Wednesday trading, with technology shares aiming to recover from Tuesday’s late-session decline. Investors remain committed to defending the market’s robust autumn rally as the third quarter earnings season commences.
The tech sector is seeking a rebound, particularly in chip-related stocks, following a downturn triggered by discouraging news from European semiconductor equipment manufacturer ASML. The company warned of subdued demand extending into 2025, excluding artificial
intelligence-related segments. ASML CEO Christophe Fouquet stated, “The recovery appears to be more gradual than previously anticipated, a trend expected to persist into 2025, leading to customer caution.”
Adding to the sector’s woes, a Bloomberg report suggested that the Biden administration is considering restrictions on overseas chip sales to certain countries deemed national security risks. These factors contributed to a 5.4% drop in the Ban Eck Semiconductor ETF by Tuesday’s market close.
Despite Tuesday’s setbacks, some major chip manufacturers are showing signs of resilience in premarket trading. Nvidia, which experienced a 4.5% decline on Tuesday, is poised for a modest gain at the open. Similar trends are observed for Intel and Advanced Micro Devices.
The broader market indices are reflecting this cautious optimism. The Nasdaq is expected to open with a 20-point gain, while the S&P 500 is looking at a slight 2-point increase. However, the Dow Jones Industrial Average is projected to start the day about 24 points lower.
In the oil markets, prices have stabilized following Tuesday’s slump, which saw West Texas Intermediate (WTI) futures hit a two-week low. Investors remain vigilant about the possibility of an Israeli strike on Iranian energy facilities as tensions in the Gulf region continue to escalate. Brent crude futures for December delivery rose slightly to $74.37 per barrel, while WTI contracts for November increased to $70.76 per barrel.
Overseas, European markets showed mixed results. The UK’s FTSE 100 rose 0.57% in early trading, buoyed by data showing inflation falling below 2% for the first time since 2021. This development led to a weakening of the pound against the dollar. Conversely, the
pan-European Stoxx 600 index declined by 0.35%, largely due to ASML’s poor performance and a significant pullback in luxury goods giant LVMH.
Asian markets also felt the impact of Wall Street’s Tuesday sell-off. Japan’s Nikkei 225 fell 1.83%, while the MSCI ex-Japan index dropped 0.62% by the close of trading.
In company-specific news, Intel shares dipped in early trading following a recommendation by China’s Cyber Security Association for the government to review the company’s products as a potential national security threat. This move is seen as part of the ongoing trade tensions between China and the United States. Intel’s stock was down 2% in premarket trading, indicating an opening price of $22.17 per share.
As the market navigates these various headwinds and attempts to maintain its recent gains, investors will be closely watching the unfolding earnings season for further direction. The interplay between geopolitical tensions, technological advancements, and economic indicators continues to shape the complex landscape of global financial markets.