Equities: Semiconductor selloff pressures Wall Street - Deutsche Bank

Deutsche Bank strategists describe a cautious session for United States (US) equities, with the S&P 500 slipping as AI‑chip names sold off ahead of Nvidia’s earnings. While the equal‑weighted S&P approached record highs, headline indices were dragged lower by semiconductor weakness. The report also notes that US equity futures turned slightly higher in Asian trading after the prior day’s declines.

Semiconductor weakness drags indices

"In equities, sentiment was apprehensive, with the S&P 500 (-0.28%) and Nasdaq (-0.76%) moving lower, though the equal-weighted version of the S&P (+0.10%) inched up to within 0.5% of its all-time high."

"But the main indices were weighed down by renewed concerns over AI-chipmaker stocks, with Sandisk (-6.45%) and Micron (-5.83%) among the worst performers in the S&P 500 and the Philly Semiconductor Index falling -2.70%."

"Nvidia fell -2.91% ahead of its earnings release tomorrow, posting a seventh consecutive decline. That’s its longest losing streak since September 2022, two months before the public release of ChatGPT by OpenAI that then triggered Nvidia’s meteoric rise to become the world’s most valuable company."

"Yesterday’s tech declines have largely carried over into Asian markets this morning, with the KOSPI (-0.72%) leading on the downside, though it has recovered from being down more than -2% down early in the session."

"Meanwhile, US equity futures on both the S&P 500 (+0.12%) and Nasdaq (+0.35%) are slightly higher after yesterday’s declines."

"In Europe, equities were mixed yesterday. The Stoxx 600 (+0.005%) was flat, with gains for the FTSE 100 (+0.35%) and IBEX 35 (+0.69%) offsetting losses for the CAC 40 (-0.37%) and DAX (-0.11%)."