4:20pm: Market rallies lose steam
Major indexes fell in late trading on Tuesday, with technology and energy stocks leading the declines.
The S&P 500 dropped 0.8% to close at 5,815, the Dow Jones Industrial Average fell 0.8% at 42,740, and the Nasdaq slipped 1% to end the day at 18,316.
This pullback followed significant gains on Monday when technology stocks pushed the S&P 500 and Dow to record closing highs.
2:40pm: Canada's inflation slows
News from up north: Canada's inflation fell to 1.6% year-over-year in September 2024, down from 2.0% in August, primarily due to lower gasoline prices. Core inflation remained steady at 2.4% year-over-year.
Bank of America expects a 25 basis point rate cut from the Bank of Canada in October, with the possibility of further cuts down to 3.0%. However, the risk of a 50bp cut exists.
Recent positive labor data and stable core inflation suggest that significant economic deceleration has not occurred, reducing the need for larger cuts.
1:12pm: Chipmakers weigh on Nasdaq
Equities struggled in the early afternoon amid a pullback in chip stocks, led by ASML Holding NV (NASDAQ:ASML) which sank almost 17% on disappointing earnings released a day earlier than expected.
This weighed on the tech-laden Nasdaq, which was down 0.9% at 18,335 points.
The S&P 500 was down 0.5% at 5,831 points and the Dow Jones shed 0.4% at 42,904 points.
Crude oil prices, meanwhile, were down almost 5% as supply concerns eased on reports Israel is not planning on attacking Iran’s oil infrastructure.
"Monday's OPEC+ and now IEA demand growth forecasts cuts amid alleviated fears of a major supply disruption in the Middle East weigh on the price of oil,” IG senior technical analyst Axel Rudolph commented.
"Following last week's record highs in US stock indices and this week's German DAX 40 new all-time high, some investors seem to be taking money off the table ahead of option expiries later in the week.”
11:55am: Nvidia suffers from chip export worries
Chip stocks tumbled Tuesday morning, with NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) (NVIDIA Corp (NASDAQ:NVDA, ETR:NVD), NVIDIA Corp (NASDAQ:NVDA, ETR:NVD)) dropping 5% after reaching a record-high close the previous session.
The PHLX Semiconductor Index (SOX) fell 4%, weighed down by declines in Arm Holdings (ARM), KLA Corp (NASDAQ:KLAC, ETR:KLA) (KLA Corp (NASDAQ:KLAC, ETR:KLA), KLA Corp (NASDAQ:KLAC, ETR:KLA)) (KLAC), Advanced Micro Devices (AMD), and ASML Holding (ASML).
The sell-off followed reports that the US government may cap the sale of advanced artificial intelligence chips from American companies to certain countries. According to Bloomberg, the Biden administration is considering new limits on export licenses for AI chips from companies like Nvidia and AMD, citing national security concerns.
11:15am: Oil prices sink as demand forecasts cut
Forecasts for oil demand for this year and next have been cut by the International Energy Agency, putting more pressure on crude oil prices.
The IEA said the market is "faced with a sizeable surplus in the new year", as it joined OPEC in cutting demand estimates for 2024 and 2025.
While also reassuring that it is ready to cover any supply disruption from Iran if such a situation arises, the agency's October report included a prediction that global oil demand will expand by almost 900k barrels per day (kb/d) in 2024 and close to 1 million barrels per day (mb/d) in 2025, sharply down from 2 mb/d seen between 2022 and 2023.
Lower demand from China is the key element in the deceleration, accounting for around 20% of global gains both this year and next year, compared to almost 70% in 2023.
9.56am: Nasdaq and S&P open higher, Dow falls
It's been a mixed start for US stocks.
The Dow Jones has dropped 0.5% in early trading, with Caterpillar, Boeing and Amgen the biggest fallers.
Meanwhile, the S&P 500 has added 0.1% to its record closing high from the day before, with Walgreens Boots Alliance top of the leaderboard as its earnings topped estimates.
Nasdaq is up 0.2%, led by gains for semiconductor stocks like ARM Holdings, Qualcomm and ASML.
The Russell 2000 is also up 0.2%.
7.40am: S&P set to extend gains in mixed start
Wall Street stock markets are set for a mixed start on Tuesday, though bank sector earnings continue to come in better than expected.
S&P 500 futures suggest there could be a slight increase on the record high reached at the start of the week, while Dow Jones futures are pointing to a 0.1% gain and Nasdaq futures to a 0.1% drop.
Yesterday, the S&P rose 0.8% to notch its 46th new high of the year, while the Nasdaq added 0.9% and the Dow Jones climbed 0.5%.
Nvidia, which was a big driving force as it advanced 2.4% to its own record closing high, is set to drop back 0.5% today.
Oil-related stocks might beat a retreat as WTI crude futures are down 4.3% at $70.65 a barrel.
Among the earnings reports before the opening bell, there were better-than-expected updates from Goldman Sachs Group Inc (NYSE:GS, ETR:GOS) and Bank of America Corp, with their shares up 3.5% and 2.2% in premarket trading.
Goldman reported a jump in third-quarter earnings to $8.40 per share, smashing the Street's $6.89 estimate, as revenue came in at $12.7 billion versus $11.8 billion forecasts.
This was on the back of investment banking strength amid a rebound in dealmaking, with CEO 'DJ' David Solomon hailing "the strength of our world-class franchise in an improving operating environment".
BofA reported a drop in third-quarter profit on Tuesday, but earnings per share of $0.81 beat the Street's $0.77 cents average estimate, while revenues of $25.49 billion were slightly ahead of expectations.
CEO Brian Moynihan felt it was a "solid" set of numbers, where there was also growth in investment banking, asset management and trading revenue.