Key facts
- US stocks opened mixed on Tuesday as investors evaluated bank earnings and weakness in chip stocks.
- The S&P 500 and Nasdaq Composite indices fell at the opening bell.
- The Dow Jones Industrial Average rose at the open.
- Major US banks including JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup were scheduled to report third-quarter results.
- Chip stocks, including Nvidia, AMD, and Micron Technology, were under pressure.
US stocks opened with mixed results on Tuesday, as investors weighed a barrage of quarterly earnings reports from major US banks against renewed selling pressure in chip stocks. The S&P 500 and the Nasdaq Composite indices began the session lower, while the Dow Jones Industrial Average saw an uptick.
Big US lenders, including JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup, were slated to release their third-quarter results before the market opened. Their shares showed modest gains in premarket trading. Overall S&P 500 earnings for the July-September quarter are anticipated to grow by 30.6%, with technology and energy sectors expected to lead the gains, according to LSEG data.
Chipmakers continued to face headwinds, with Nvidia shedding 0.5% and AMD and Marvell Technology easing 1.2% and 2.4% respectively in premarket trading. Memory chipmaker Micron Technology dipped 2.8%, and data storage companies like Western Digital, Seagate, and Sandisk saw declines ranging from 3.5% to 4.5%. Concerns about potential competition from China's CXMT were cited as a factor impacting the sector. Broadcom CEO Hock Tan commented on the significant capital investment in the AI sector, likening some of the flow to "casino gambling."
Broader market sentiment has been supported by hopes of a strong earnings season, despite ongoing geopolitical concerns, rising government bond yields, and inflation worries. Traders are widely expecting the Federal Reserve to maintain current interest rates this month, though a December hike remains a possibility. Federal Reserve Governor Christopher Waller noted that recent increases in US bond yields are attributed to robust economic growth and AI investment rather than inflation expectations.