Wall Street saw a significant drop on Tuesday, with disappointing earnings from ASML (AS:ASML) sparking a widespread selloff among chipmakers, while a steep drop in oil prices weighed heavily on energy stocks. The S&P 500 fell by 0.70%, the Nasdaq 100 dropped 1.20%, and the Dow plunged 324 points. In its latest earnings update, Trading Economics reported that “ ASML shares plunged 16.5% after cutting its outlook, pressuring other chip makers including Nvidia (NASDAQ:NVDA) (-4.5%), Broadcom (NASDAQ:AVGO) (-3.5%), AMD (NASDAQ:AMD) (-5.2%) and Intel (NASDAQ:INTC) (-3.3%). Energy stocks were under pressure as Exxon Mobil (NYSE:XOM) (-3%) and Chevron (NYSE:CVX) (-2.7%) declined on the back of a sharp drop in oil prices. Additionally, UnitedHealth (NYSE:UNH) fell 8.2% after issuing a weaker earnings forecast. In contrast, Bank of America (NYSE:BAC) gained 0.5% after reporting stronger-than-expected third-quarter profits and revenue. Apple (NASDAQ:AAPL) added 1.1% after hitting an all-time intraday high of $237.49, following reports that indicated strong demand for Apple's previous models, bolstered by the iPhone 16 launch.”
European stock markets opened higher but soon reversed, with the STOXX 50 falling by 0.40% and the STOXX 600 slipping 0.20% after reaching a two-week high. Investors are keeping a close eye on quarterly corporate earnings and anticipating the European Central Bank's upcoming monetary policy decision later in the week. Trading Economics reported that “LVMH (EPA:LVMH) was down 1.7% ahead of its eagerly anticipated third-quarter revenue report. L'Oreal (EPA:OREP) (-2.9%) and Kering (EPA:PRTP) (-0.9%) were also under heavy pressure. In addition, the energy sector underperformed due to declining oil prices, with TotalEnergies (EPA:TTEF) (-4.2%), Repsol (BME:REP) (-2.5%) and Eni (-2.4%) all in the red. On the other hand, the telecom sector stands out as a top performer, with shares of Ericsson (BS:ERICAs) soaring 7.9% after its earnings for Q3 topped estimates as the company's deal with AT&T Inc. began to pay off. Nokia (HE:NOKIA) (0.8%) and Deutsche Telekom (ETR:DTEGn) (1.1%) were also in the green.”
The Shanghai Composite fell 2.53%, while the Shenzhen Component dropped 2.53%, erasing gains from the previous session, driven by concerns that China’s stimulus measures may not be enough to prevent further economic slowdown. Top Chinese officials detailed the country’s fiscal stimulus plan during a Saturday briefing without specifying the rescue package amount, though reports indicated that China could raise an additional 6 trillion yuan through treasury bonds over three years.
The local bourse fell by about 0.50% to 85 950 points on Tuesday, ending a three-day winning streak, with declines led by resource-linked stocks, particularly oil companies. Traders kept an eye on the ongoing earnings season in the US while awaiting more details on Beijing's economic stimulus plans. In economic news, Trading Economics reported that local business confidence dipped in September, though the overall trend remains positive. Additionally, the South African Reserve Bank presented a moderately optimistic outlook for inflation and economic growth in its semi-annual Monetary Policy Review. At 18h30, the rand had weakened 0.43% to R17.63/$, 0.33% to R19.21/€ and 0.61% to R23.06/£.
Oil prices dropped by 3% during Tuesday's trading session, driven by a weaker demand outlook and reports suggesting Israel may refrain from targeting Iranian oil facilities, alleviating concerns about potential supply disruptions. By the close of business, Brent crude futures had declined 3% to $75.11 per barrel, while US West Texas Intermediate futures were down 3.10% at $71.57 per barrel. Trading Economics further reported that gold was flat as investors awaited fresh insights on the Federal Reserve’s stance on US interest rate reductions for further direction on bullion prices.
