Chips, Broader Market Up Early on Peace Talk Hopes

Nasdaq Tumbles Early as Chip Selloff Deepens

By Joe Mazzola

(Tuesday market open) A selloff in semiconductor stocks deepened in early trading, dragging the Nasdaq lower to near correction territory, after reports Monday of a Chinese breakthrough in chip-making technology.

Earnings season picks up today. In the chips space, KLA (KLAC), Seagate Technology (STX), and NXP Semiconductors (NXPI) report after the close. The Federal Reserve also begins its two-day meeting amid increasingly hawkish rhetoric from some board members. The Fed is still expected to hold the policy rate unchanged tomorrow, but the recent jump in oil prices should help make it interesting. Consumer confidence data is due at 10 a.m. ET.

The major indexes opened sharply higher Monday and quickly retreated, with positive vibes from falling oil prices giving way to AI- and semiconductor-related jitters. The indexes finished mixed for the day, with the Nasdaq shedding 0.18%, the S&P 500 Index (SPX) ending little-changed, and the Dow Jones Industrial Average gaining 0.51%. Investors pummeled chip stocks yet again after news broke that a Chinese company was producing a key type of machinery used in making chips. Sandisk fell another 11% to rank as the worst S&P performer on the day.

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