Us Stock Indexes Close Lower

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Us Stock Indexes Close Lower

Us Stock Indexes Close Lower Due To Chip Stocks Decline

The majority of the US stock indexes ended Tuesday's session in the red as the chip stocks from Nasdaq tumbled. At the same time, the energy sector has also declined by 3% due to the drop in oil prices.

The recent earnings report was also mixed, but the financial sector showed strong growth. However, there were also some outliers, such as the UnitedHealth (UNH), which lost 8% of its stock value.

Nvidia Stocks Down By 4.7%

The major reason why the Nasdaq went through the sell-off was due to the Nvidia (NVDA). The data shows that Nvidia stock declined by 4.7% after making a high on Monday.

The reason behind the Nvidia decline was the rumors that the US government was thinking about capping exports of AI chips by US companies.

This news was enough to send the Chip stocks tumbling lower with ASML losing 16% of its stocks which also dragged the Philadelphia semiconductor index down by 5.3%.

According to an expert from Charles Schwab, chip stocks are going through a lot of stress. This has also weighed down the tech sector as a whole.

According to him, the earnings were weaker than the forecast, which was used as an excuse to sell the chip stocks. However, he added that the number of stocks that were advancing was the same as the declining stocks.

Based on this, he added that the washout seen in the US stocks is not broad-based. In fact, it is a sign that mega-cap stocks such as Nvidia are pulling down the entire US stock index.

Another highlight of the day was the energy industry index which declined by 3% at the session close. In terms of big percentage declines on a daily basis, such a move was only seen during October 2023.

Meanwhile, the DJIA is down by 0.75% while the S&P 500 is down by 0.76%. Similarly, the Nasdaq Composite has also shed 1.01% of its value for the day.

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