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Market Dynamics: Tech Stocks Slide as Small-Caps Surge Amid Fed ...
2024-07-17 14:59:07
Markets
Stocks
Technology

Market Dynamics: Tech Stocks Slide as Small-Caps Surge Amid Fed Expectations

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Tech and chip stocks like Apple, Microsoft, and Nvidia are dragging down U.S. stock futures as investors focus on small-caps amidst anticipation of Fed rate cuts. Asian markets are mixed on Fed rate cut hopes, with Australian stocks hitting record highs.

Small-cap Russell 2000 is outperforming big tech, surging 12.27% YTD, while the S&P 500 equal-weight index is up 4.8%. A market rotation is underway as high-flying stocks slow.

Concerns about overbought markets arise, especially after Tesla's stumble. Despite potential corrections, moderate market adjustments are expected, with the Federal Reserve likely to mitigate severe damage, leaving the S&P 500 with a 5% yearly gain.

Related news on that topic:

Chip Stocks Tumble on Fears of Tighter US Curbs on Sales to China

Chip stocks, including ASML, Nvidia, AMD, Qualcomm, Arm, and TSMC, experienced a significant decline due to reports of impending US export restrictions to China. This decline in sales to China impacted US chipmakers, while generative AI and hardware drove rallies. Despite the sell-off, ASML managed to beat Q2 estimates. TSMC continued to dominate the market for advanced chips used in AI, smartphones, and fighter jets. Concerns over potential conflict were amplified by President Trump's comments regarding Taiwan. ASML's outlook was clouded by the risk of more severe US curbs, and the company confirmed flat 2023 sales before anticipating strong growth in 2025. The market also saw the slumping of Dow Jones futures and the decline of tech stocks like Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The global chip industry is facing shockwaves due to geopolitical tensions, with TSMC dealing with market volatility and investor anxiety. To mitigate risks, companies like TSMC must diversify supply chains and engage with policymakers. The stability and growth of the semiconductor sector depend on unity and strategic foresight from industry leaders and global stakeholders.

Global Stock Markets React to Potential US Crackdown on Chipmakers

Global stock markets experienced significant volatility after reports emerged that the US plans to implement stricter export restrictions on chip technology to China. Tech shares tumbled globally, with London FTSE showing a slight increase while Germany DAX and Paris CAC fell. Companies such as Tokyo Electron, Disco, and Lasertec experienced significant drops in their stock prices, as did ASML, Nvidia, and other chipmakers. Taiwan chip stocks also fell following criticism from former President Donald Trump. The yen rallied after reports of potential currency intervention. The US has blocked China's access to advanced chips and has urged its allies to follow suit. China has become ASML's second-largest market as companies rushed to buy equipment before new licensing requirements. China's self-sufficiency in advanced technology was a focus of the Communist Party meeting. Despite expectations of a decline, US retailers' sales held firm, leading many to anticipate rate cuts by the Federal Reserve.

Read 5 more recent news on this topic

The press radar on this topic:

The Street
17. Juli 2024 um 11:55

Market rotation emerging as high-flying stocks slow TheStreet Daily Newsletter

Finance
Economy
Technology
The stock market has experienced a rapid and powerful rally since October, leading to concerns that it may be overbought. The tech-heavy Nasdaq and Nasdaq-100 indexes have hit record levels, but Thursday saw a surprising tech-stock stumble, with Tesla's 8.4% decline triggering a broader market pullback. This volatility raises questions about the potential for a market correction, which could be triggered by further evidence of economic softness. However, the Federal Reserve is unlikely to allow..
Yahoo Finance
17. Juli 2024 um 08:23

Stock market today: Asian stocks slip, while Australian index tracks Wall St rally to hit record

Finance
Politics
Economy
Asian stocks mixed on Fed rate cut expectations; Australia index hits record; U.S. futures, oil up; Japan's Nikkei, South Korea's Kospi down; Hong Kong's Hang Seng up, Shanghai down; Taiwan's Taiex down; Trump-linked stock swings; U.S. retail sales, 10-year yield; inflation, recession risks for Fed; S&P 500, Dow, Nasdaq performance.
Yahoo Finance
17. Juli 2024 um 10:16

Wall St futures slump after rally as tech stocks slide

Finance
Technology
Economy
U.S. stock futures slide, led by tech and chip stocks like Apple, Microsoft, Nvidia, ASML, and Taiwan Semiconductor Manufacturing, as investors shift focus to small-caps, await corporate earnings and economic data, amid expectations of Fed rate cuts, a potential Trump presidency, and the Biden Administration's crackdown on Chinese chips.
Inc.com
17. Juli 2024 um 12:30

Small-cap Stocks Can't Stop Skyrocketing. Investors Can Thank the Fed

Finance
Economy
Technology
Small-cap Russell 2000 surging 12.27% YTD, 92% in past week, outpacing big tech like Nvidia, Microsoft. S&P 500 equal-weight index up 4.8% in past week. Investors piling into small-caps to benefit from expected Fed rate cuts per Powell, CME's FedWatchTool; DataTrek's Rabe, Colas say small-caps have momentum but S&P 500 should catch up, unlike 2001 tech bubble, 2021 retail mania.
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