Weekday edition
Chip stocks slide on Chinese memory design progress
Applied Materials led the drop while broad index funds held up. JPMorgan fell on a profit miss.
At Tuesday’s close: S&P 500 −0.02%, Nasdaq-100 −0.31%, Dow −0.35%
Applied Materials tumbles after China's CXMT reports memory chip progress
Applied Materials (AMAT) tumbled 6.7% to $464.24 on Tuesday. The drop came after Chinese memory maker CXMT reported progress on a denser memory-cell design. Micron Technology (MU) fell 3.6%, and SK Hynix (SKHY) tumbled 3.2%. The selling started in Seoul, where shares of Samsung Electronics and SK Hynix fell sharply.
The losses stayed mostly within chips. A semiconductor fund (SMH) fell 0.5%, and the Nasdaq-100 fell 0.3%. The S&P 500 was little changed. The energy sector fund rose 1.8%. The worry is competition. A more efficient Chinese design could pressure established memory makers such as Samsung and SK Hynix. Applied Materials sells the equipment used to make chips.
For readers
What it means for you: Most broad index funds and 401(k) plans hold chipmakers, but the wider market barely moved. A $1,000 stake in a Nasdaq-100 fund lost $3. Funds focused on semiconductors could see bigger swings if worries about Chinese competition in memory chips persist.
Read the full story, MU price history and analyst ratings, AMAT price history and analyst ratings
Markets
Tuesday’s close
| Market | Level | Change |
|---|---|---|
| S&P 500 | 7,805.45 | −0.02% |
| Nasdaq-100 | 30,569.48 | −0.31% |
| Dow | 51,670.10 | −0.35% |
| 10-Yr | 5.21% | −3 bp |
| Bitcoin (24 hr)As of this edition | $83,487 | −0.33% |
If you own
Bond funds and mortgage rates could react to the Consumer Price Index, a monthly gauge of prices people pay, due at 8:30 a.m. ET. The 10-year Treasury yield stands at 5.21% going in. A hotter reading could push yields and mortgage quotes up; a cooler one might ease them.
Sector funds showed a wide split. Energy companies rose 1.8%, and health care companies slid 1.4%. A single-sector fund could deliver results very different from a broad index fund on days like this.
International stocks and travel costs could pull in opposite directions after a fund that tracks the U.S. dollar (UUP) fell 0.4%. A weaker dollar may lift the dollar value of overseas holdings, but it could make trips abroad cost more.
Existing bond holdings may have gained a little as the 10-year Treasury yield fell 3 basis points to 5.21%. Bond prices move opposite to yields, and a lower yield could support the value of funds that already hold bonds.
Need to know
Top stories
- 1
Banks · −0.86% JPMorgan falls as slower dealmaking leads to a profit miss. JPMorgan Chase shares fell 0.9% to $331.43 after the bank missed quarterly profit and revenue forecasts. Slower dealmaking and weaker bond trading weighed on results, the bank said. Chief executive Jamie Dimon warned about inflation, rising interest rates and wider economic risks. Those warnings could shape how other banks talk about lending and borrowing costs this reporting season. Read more
- 2
Health care · −5.73% Johnson & Johnson shares fall despite beating estimates and raising outlook. Johnson & Johnson shares fell 5.7% to $248.61, even though quarterly sales and profit topped analyst forecasts. The company also raised its full-year sales and earnings outlook, citing strength in cancer drugs. Adjusted earnings per share still fell from a year earlier. The wider health care sector fund slid 1.4%. Read more
- 3
Money market funds draw their biggest weekly inflow since April 2020. Global money market funds took in their largest weekly inflow since April 2020, according to reports, lifting U.S. money fund assets to a record. These funds hold short-term debt such as Treasury bills and are a common place to park cash. The 3-month Treasury bill yield edged up 1 basis point to 4.26%. Steady demand for safe assets could keep attention on cash-like funds. Read more
How it works
Inflation
Headline inflation tracks the household basket. The Consumer Price Index, or CPI, tracks what households pay for a fixed basket of goods and services, from groceries and rent to gasoline. Its change over the past year is the headline inflation rate. Today's issue also covers a chip-stock selloff: Micron tumbled 3.6% after China's CXMT reported progress on a denser memory-cell design. Moves like that show up in share prices, not in the basket. The government publishes the report monthly, and markets often react on release day.
Coming up
Consumer Price Index, September. The monthly inflation report; it shapes expectations for the Fed's next rate decision.
Producer Price Index, September. Prices businesses receive, an early signal for consumer inflation.
Advance Retail Sales, September. How much shoppers spent last month, a gauge of consumer demand.
The close
The government releases the September Consumer Price Index at 8:30 a.m. ET. A hotter or cooler reading could shift expectations for the Federal Reserve's next rate decision, which may move mortgage rates and savings yields. Real Earnings, which tracks wages after inflation, arrives at the same time. September Business Formation Statistics, an early read on new business applications, are also due. The release time is not confirmed.
Not investment advice.