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U.S. stocks dip as chipmakers stumble

Stocks Dip

U.S. stocks closed lower on Tuesday as investors reacted to downbeat earnings from ASML Holding, which dropped a day earlier than expected, sending chipmaker stocks lower across the board. Shares of the leading semiconductor supplier sank more than 15% after its earnings showed a disappointing sales outlook for 2025. Nvidia shares fell in tandem, dropping around 5%.

The Dow Jones Industrial Average edged down about 0.8%, or more than 300 points.

The blue-chip index was dragged down by another major component, which saw shares fall around 8% after its 2025 profit guidance missed estimates. Meanwhile, the benchmark S&P 500 also dropped roughly 0.8%, while the tech-heavy Nasdaq Composite sank around 1%.

Investors also assessed a fresh crop of bank earnings before the bell, with Goldman Sachs reporting a rise in dealmaking from a year ago. Similarly, another major bank posted an earnings beat amid its own outperformance in investment banking. Shares in a major pharmacy chain finished the day up around 15% higher as the company pursues a turnaround.

Outside of earnings, energy was another major focus, with crude oil prices dropping on a report regarding diplomatic agreements involving Israel and Iran. United Airlines reported quarterly earnings that beat expectations on both the top and bottom lines, sending the stock about 1% higher in after-hours trading. Adjusted earnings hit $3.33 per share in the quarter, while revenue rose 2.5% year over year to $14.84 billion.

The airline also announced its first stock buyback since before the pandemic, planning to purchase $1.5 billion worth of shares. San Francisco Federal Reserve President Mary Daly noted in a speech that the U.S. economic expansion could continue further, despite recent pressures.

Chipmaker struggles hit US stocks

Daly emphasized the ongoing efforts to achieve a “soft landing” and stated that maintaining low inflation remains critical. In other developments, trading in Trump Media & Technology Group stock was briefly halted due to volatility. Shares in the company suddenly plunged around 5% in late afternoon trading.

Netflix is set to report earnings later this week, with analysts predicting another price hike across its various streaming tiers. Netflix is expected to report earnings of $5.16 per share on revenue of $9.78 billion. Investors have praised the company’s foray into sports and live events, and its ad tier continues to gain traction.

Some Wall Street analysts, however, remain cautious about the stock’s high valuation. Wall Street strategists are becoming more bullish on the stock market rally. UBS Investment Bank equity strategist Jonathan Golub boosted his year-end target for the S&P 500, projecting the index to reach 5,850 by the end of 2024 and 6,400 by the end of 2025.

Golub notes the economic backdrop is “supportive,” with resilient growth data, Federal Reserve interest rate cuts, and falling recession risks contributing to his forecast. Apple stock achieved a new intraday high of $237.49 on Tuesday, adding about $70 billion to its market capitalization. This puts it further ahead of Nvidia as the world’s most valuable company.

Nvidia, by contrast, saw its share price fall around 4%. Overall, the day’s trading reflected a turbulent response to earnings reports and economic data, with significant movement in key sectors such as technology, banking, and energy.

Jake Mazzotti

Jake Mazzotti is a visionary male CEO with a track record of leading successful companies to new heights. With his strategic mindset, he navigates complex business landscapes, drives innovation, and inspires teams to achieve exceptional results. In his spare time, Jake loves spending time with his wife and four children.
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