Wall Street's major stock indexes slipped on Tuesday, with the Nasdaq leading declines as chip stocks sold off on fears of weak demand while energy shares fell with oil prices.
Earnings reports were also a mixed bag with mostly positive reactions to financial services reports contrasting with a 7% slump in shares of United Health (UNH.N), after the health insurer forecast 2025 profit below Wall Street estimates.
The biggest drag on the Nasdaq came from Nvidia (NVDA.O), the leading chip maker for artificial intelligence. Its shares were down about 5% after a record-high close on Monday, following a media report that the Biden administration is considering capping AI chip exports by U.S. companies.
Chip stocks lost ground broadly after results of chip-equipment-maker ASML Holdings (ASML.AS), showed downbeat expectations for 2025 sales. ASML's U.S.-listed shares dropped 17%, while the Philadelphia semiconductor index (.SOX), fell 4.9%.
"The fact ASML slowed guidance means demand for all kind of chips, with the exception of chips for generative AI, is rather weak," said Irene Tunkel, chief us equity strategist at BCA research. "Weak demand for chips indicates lower global growth. It means global demand for pretty much everything is weak,"
Tunkel noted that defensive sectors were outperforming as investors worried about global economic growth.
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