NEW YORK: Wall Street slipped on Tuesday, with the tech-heavy Nasdaq leading the decline, as a slump in semiconductor and oil stocks offset strong quarterly results from major banks.
Nvidia tumbled 5.6% following a record high close on Monday, after a report the Biden administration is considering capping AI-chip exports by US companies.
Chip stocks lost more ground after results of chip-equipment-maker ASML Holdings, published early in an apparent error, showed the company was downbeat on its 2025 sales. ASML’s US-listing dropped 17%, while an index of chip stocks fell 4.6%.
Energy stocks fell 2.2%, as crude prices fell due to a weaker demand outlook and after a media report suggested Israel would not strike Iranian oil targets.
The declines offset broadly positive results from major banks, as Bank of America jumped 2% following a third-quarter profit beat, while Charles Schwab soared 8.3% after beating estimates.
The broader Banks index rose 1.3% and was trading at its highest level in more than two years, while an index of regional banks gained 2.4%.
Meanwhile, the blue-chip Dow opened at a record high but fell quickly, weighed down by a 7.3% slump in health insurer UnitedHealth after the company forecast 2025 profit below Wall Street estimates.
“There’s a lot of indecision today, with Nvidia and some of the higher flyers seeing more weakness,” said Ryan Detrick, chief market strategist at the Carson Group.
Detrick said investors were likely also booking some profits after a thin trading session on Monday, when bond markets were closed for a holiday, as they looked ahead to key economic data and a continued deluge of earnings over the next few weeks.
Both the Dow and the S&P 500 closed at record highs on Monday.
The Dow Jones Industrial Average fell 169.70 points, or 0.39%, to 42,895.52, the S&P 500 lost 25.99 points, or 0.44%, to 5,833.86, and the Nasdaq Composite lost 173.96 points, or 0.93%, to 18,329.97.
Bucking the decline in tech stocks, Apple rose 1.8% to touch a record high.
A number of S&P 500 companies are scheduled to report results through the week. The large ones will need to justify their expensive stock valuations to investors, particularly in the tech sector, where valuations have grown increasingly inflated in the past year.
Key economic data, including monthly retail sales and industrial production figures, are due this week, while Federal Reserve officials Adriana Kugler and Raphael Bostic are expected to speak on the day.