Stock market indexes traded lower in the first hour of Tuesday’s session, with chips and big tech taking the brunt of selling pressure. Energy stocks, led by natural gas plays, rose after Russian oil flows through central Europe were halted.
The Dow Jones Industrial Average is trading lower by 0.2% at this hour while the S&P 500 is down 0.5%. Chips and small caps are weighing on the Nasdaq composite, dropping the index 0.8%.
Volume has spiked 8% on the Nasdaq while slumping 12% on the NYSE, as compared to the same time on Monday.
Crude oil gained ground for the third day in a row, lifting to $91.80 per barrel. Bond yields ticked higher across all maturities while volatility rose, lifting S&P volatility index above 22.
Energy stocks are leading the upside, with SPDR Energy Select Sector ETF (XLE) lifting 2.4%. However, profit making is hitting solar stocks after the two-week rally, dropping Invesco solar ETF (TAN) 1%.
Novavax (NVAX), Shockwave Medical (SWAV) and Take-Two Interactive (TTWO) were key earnings movers after Monday’s closing bell.
Vaccine maker Novavax has crashed 24% after cutting 2022 revenue guidance due to poor demand for its Covid-19 vaccine. Shockwave has soared more than 13% in early trade, while video game creator Take-Two warned about slumping profits.
U.S. Stock Market Today Overview
Last Update: 10:24 AM ET 8/9/2022
Both Nvidia (NVDA) and Microsoft (MSFT) have reported weak gaming outlooks in recent weeks. Take-Two stock is trading 4.4% lower at this hour.
More Pressure on Semiconductors
The stock market is getting hit by the week’s second profit warning from the volatile semiconductor group.
Micron (MU) warned that fiscal Q4 revenue may not reach the lower end of guidance, dropping the stock more than 4%. Micron has now lost more than 6% in the last two sessions.
The news comes just one day after Nvidia shocked market watchers, sharply lowering revenue guidance due to a glut of GPU units in the secondary market.
The Philadelphia semiconductor index has sliced through the psychological 3000 level after the one-two punch, further aggravated by China’s military operations in the Taiwan Strait. Production at hundreds of U.S., European and Asian companies are highly dependent on Taiwan Semiconductor (TSM), the world’s large chip foundry.
Coinbase Global Reports After The Close
Cryptocurrency technology provider Coinbase Global (COIN) reports Q2 results after Tuesday’s closing bell. Consensus estimates are looking for a loss of $1.23 per share on $868 million in revenue.
COIN stock is highly levered to Bitcoin and other crypto prices. Those markets slumped to 18-month lows in the second quarter, pressuring profits.
Buying interest has surged since the stock tested the May low in June, lifting IBD’s Accumulation/Distribution Rating to a pristine “A”. Coinbase posted extraordinary 2021 EPS growth but profits have evaporated this year, as a result of the crypto crash.
Oppenheimer analyst Owen Lau outlined COIN challenges in a recent note warning: “The downward spiral and the fallout from key crypto players are likely to create more strain and contagious risk. With the Fed’s tightening policy, total market cap of crypto declined by (around) 55% for 2022’s second quarter, and trading volume subsided. COIN is going into one of its toughest prints as a public company.”
Tuesday Stock Market Highlights
No. 39 on the IBD 50, Cheniere Energy (LNG) tagged the 150.10 buy point in a 58-day consolidation pattern on Monday and pulled back. It’s flat so far on Tuesday, still within 1% of the critical level.
No. 18 Synopsys (SNPS) probed the 377.70 buy point of a 153-day consolidation and pulled back. The stock is trading less than 2% from the buy point in the first hour.
No. 2 New Fortress Energy (NFE) rallied into the 52.47 buy point of a cup base to start the new week and pushed toward the top of the 5% buy zone on Tuesday. Volume posted the highest level since April on Monday, fulfilling an important element for a successful breakout.
Innovator IBD 50 ETF (FFTY) fell more than 1%.
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