• Markets
• News
• Learn

U.S. stocks slipped by midday Tuesday as a chip-sector rout — sparked by a 5% plunge in South Korea’s KOSPI — offset gains in banks and energy, with the S&P 500 hovering just below 7,800 and the Nasdaq 100 leading declines.

Chip stocks were hit after China’s CXMT announced progress on a more efficient memory-cell design, sending Samsung Electronics Co. Ltd. (OTC:SSNLF) and SK Hynix Inc. (NASDAQ:SKHY) down roughly 8% each in Seoul.

That spilled into U.S. semiconductors, where Micron Technology Inc. (NASDAQ:MU) dropped 4.9% and Applied Materials Inc. (NASDAQ:AMAT) tumbled 6.5%.

The S&P 500 slipped 0.2% to 7,795. The Nasdaq 100 fell 0.5% to 30,511, with chip weakness weighing on it. The Russell 2000 lost 0.6% to 2,777.

Big-Bank Earnings Support Dow

 JPMorgan Chase & Co. (NYSE:JPM) rose about 1% even after its profit of $15.3 billion, or $5.57 per share, missed the $5.90 estimate, while Goldman Sachs Group Inc. (NYSE:GS) gained after earnings of $17.01 per share crushed the $13.02 consensus.

Wells Fargo & Co. (NYSE:WFC) fell 1.5% even as earnings of $1.87 per share topped the $1.84 consensus, because revenue of $21.87 billion missed the $22.31 billion forecast.

Elsewhere among blue-chip stocks, Johnson & Johnson (NYSE:JNJ) sank 6.2% despite a profit beat and a raised full-year outlook, weighed by a MedTech miss and a one-time talc litigation charge. Caterpillar Inc. (NYSE:CAT) fell 5.0% in the industrials pullback.

In energy, WTI crude traded near $93.95 per barrel, up 0.2%, while Brent edged 0.9% lower to $105.72. Gasoline has now tied 2022’s record for most days above $4 per gallon in a single year.

The 10-year Treasury yield held near 5.22%, down 2 basis points, a level that continues to cap valuations in rate-sensitive corners of the market.

Odds of another quarter-point hike at the Oct. 27-28 FOMC meeting stood near 26% as of Oct. 7, according to CME FedWatch.

Tuesday’s Performance In Major US Indices

According to the Benzinga Pro platform:

• The Vanguard S&P 500 ETF (NYSE:VOO) slipped 0.1%.
• The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) fell 0.3%.
• The Invesco QQQ Trust (NASDAQ:QQQ) declined 0.5%.
• The iShares Russell 2000 ETF (NYSE:IWM) lost 0.7%.

Chip Rout Hits Tech, Energy And Communications Hold Firm

Communication Services led the S&P 500, with the Communication Services Select Sector SPDR Fund (NYSE:XLC) up 1.1%, followed by energy, as the Energy Select Sector SPDR Fund (NYSE:XLE) gained 1.2%.

On the Downside

The Industrials Select Sector SPDR Fund (NYSE:XLI) fell 1.2% and the Health Care Select Sector SPDR Fund (NYSE:XLV) slid 1.2%, the latter dragged by Johnson & Johnson (NYSE:JNJ).

The Technology Select Sector SPDR Fund (NYSE:XLK) lost 0.5% and the Real Estate Select Sector SPDR Fund (NYSE:XLRE) dropped 0.6%, while the Financial Select Sector SPDR Fund (NYSE:XLF) edged 0.2% lower.

Among industry funds, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) rose 2.0% on firm crude, while the VanEck Semiconductor ETF (NASDAQ:SMH) fell 1.5% and the VanEck Gold Miners ETF (NYSE:GDX) slid 2.0% alongside softer gold. The SPDR S&P Regional Banking ETF (NYSE:KRE) lost 1.0%.

Flex Ltd. (NASDAQ:FLEX) fell 6.8% after announcing plans to spin off its Cloud and Power Infrastructure unit as Axiom Solutions International, in addition to the broader AI-hardware pullback. 

AST SpaceMobile Inc. (NASDAQ:ASTS) sank 8.8% after Piper Sandler cut the stock to Neutral, citing the threat from SpaceX’s direct-to-cell effort.

On the Upside

Fermi Inc. (NASDAQ:FRMI) soared 17.4% after announcing an AMD credit-support agreement for its Project Matador AI-infrastructure site in Texas, with Advanced Micro Devices Inc. (NASDAQ:AMD) named as the partner.

At last check, HF Sinclair Corp. (NYSE:DINO) was up 4.2%; Valero Energy Corp. (NYSE:VLO) up 3.2%; Phillips 66 (NYSE:PSX) up 2.9%; and Marathon Petroleum Corp. (NYSE:MPC) up 2.8%.

Tuesday’s Russell 1000 Top Gainers

Tuesday’s Russell 1000 Top Losers

Image: Shutterstock