Key Takeaways:
- The Nasdaq 100 turned positive intraday after semiconductor stocks surged.
- SanDisk jumped 4.5%, Intel gained 3%, and Micron reversed earlier losses.
- The index later gave up gains to close near five-week lows.
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Nasdaq 100 reverses 1% loss as chip stocks rally 4.5%
The Nasdaq 100 turned positive during afternoon trading Tuesday, erasing a 1% decline as semiconductor stocks staged a sharp intraday reversal.
The reversal was concentrated in chipmakers, with SanDisk Corp. surging as much as 9.8% before settling 4.5% higher, Intel Corp. adding nearly 3% and Micron Technology Inc. turning positive after opening lower, according to exchange data. The Philadelphia Semiconductor Index bounced from session lows as traders rotated into the sector following recent declines that left chip stocks oversold in the near term. Marvell Technology Inc. and Qualcomm Inc. had earlier led losses, each falling more than 7%, before paring declines. Advanced Micro Devices Inc. and Broadcom Inc. also recovered from session lows, though both closed in negative territory.
The gains proved short-lived. The Nasdaq 100 closed down 1.12% at 19,842, near five-week lows, after giving up its intraday advance. The S&P 500 fell 0.26%, while the Dow Jones Industrial Average eked out a 0.17% gain. Software stocks weighed on the tech-heavy index, with ServiceNow Inc. sliding 6% and Salesforce Inc. dropping 4%. Intuit Inc., Oracle Corp. and Palantir Technologies Inc. each fell more than 3%. Energy producers also declined as WTI crude oil fell more than 3% to a seven-week low, dragging APA Corp. and Marathon Petroleum Corp. down more than 2% each. Chevron Corp. and Exxon Mobil Corp. each fell more than 1%.
Home builders and airlines provided support on the session. Builders Firstsource Inc. rose 6% and Toll Brothers Inc. gained 5% after May existing home sales rose to a five-month high of 4.17 million, above the 4.07 million consensus. D.R. Horton Inc. and PulteGroup Inc. each added more than 4%. Alaska Air Group Inc. climbed 6% and Southwest Airlines Co. added 5% as lower fuel costs boosted profitability prospects. United Airlines Holdings Inc. rose 4%, while Carnival Corp. and Norwegian Cruise Line Holdings each added more than 2%.
The 10-year Treasury yield fell 3.6 basis points to 4.526%, as the decline in crude oil eased inflation expectations and boosted demand for safe-haven assets. The April U.S. trade deficit narrowed to $55.9 billion from $56.6 billion, narrower than the $56.1 billion expected. China's May exports rose 19.4% year over year, above the 15% consensus, offering a positive signal for global trade.
Traders are now looking ahead to the SpaceX IPO on June 12, which is set to be the largest in history at a $1.77 trillion valuation, and ongoing U.S.-Iran negotiations that could determine the path of oil prices and broader market direction. The Federal Reserve's next policy meeting on June 16-17 adds another catalyst, with markets pricing in a 3% chance of a quarter-point rate hike.
This article is for informational purposes only and does not constitute investment advice.
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