new York Price losses in the chip sector dampened the mood of investors on US stock exchanges on Friday. The Dow Jones index of standard stocks was 0.8 percent lower at 34,618 points. The broader S&P 500 lost 1.2 percent to 4,450 points, the Nasdaq technology exchange index fell by 1.6 percent to 13,708 points. A Reuters report weighed on the mood, according to which the world’s largest contract manufacturer TSMC is delaying acceptance of ordered chip machines.
Shares of Applied Materials, Lam Research and KLA Corp each fell more than four percent. Shares in the chip designer Arm initially rose another seven percent to $69 one day after the acclaimed stock market debut on the Nasdaq, but fluctuated sharply over the course of the trading day and fell 4.47 percent in the red at the close of trading.
Investors saw the positive price development on Thursday as a signal of a turnaround in the trend for IPOs. “The fact that performance was good suggests the potential for further new issuance, which is likely good for both the market and the banking sector,” said Rick Meckler, partner at Cherry Lane Investments.
>> Read also: Arm starts trading on the stock market debut with a double-digit price jump
The value of Arm, whose chips are found in most of the world’s smartphones, rivals the valuation of competitor Nvidia. The US company has had a strong year on the stock market and has very good sales forecasts. Arm’s revenue, on the other hand, has declined slightly in recent months, although the company remains highly profitable.
Softbank raised almost $5 billion through Arm’s IPO. The investment giant actually wanted to sell Arm to Nvidia for $40 billion last year. However, the sale did not take place because the authorities resisted. The reason was Arm’s licensing model, because Nvidia designs Arm processors itself and would be in direct competition with many license buyers.
US stock market expert Koch: “The probability of an interest rate increase is zero”
The fact that the IPO has been successful so far despite the abruptly interrupted price increase is also positive news for the online grocery supplier Instacart and the marketing and data automation provider Klaviyo. Both companies want to set the price for their IPOs next week.
US imports significantly more expensive
However, the economic data continues to put the markets under pressure. In August, US imports unexpectedly became significantly more expensive. They increased by 0.5 percent compared to the previous month, as the Labor Department announced on Friday in Washington. Economists surveyed by the Reuters news agency had only expected an increase of 0.3 percent, after an increase of 0.3 percent in July 0.1 (previously: 0.4) percent. Energy imports in particular became noticeably more expensive this time.
Financial markets are following developments closely as they provide an indication of inflation. This had recently increased more than expected at a rate of 3.7 percent. This does not mean that the US Federal Reserve has given the all-clear, as its target of an inflation rate of 2.0 percent is far from being achieved.
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The Fed is heading for a pause on interest rates. It is largely expected on the financial markets that the monetary authorities will leave their key rate in the range of 5.25 to 5.50 percent next Thursday. Investors are wondering whether the Fed will step up its fight against inflation this year or whether the upcoming break will mark the end of the era of interest rate hikes.
Chinese industrial production grew faster than expected. This fuels hope that the ailing Chinese economy will improve. Industrial production rose 4.5 percent in August compared to the previous year, according to current data from the National Bureau of Statistics. The figure was above forecasts for growth of four percent and exceeded July’s growth of 3.7 percent.
Meanwhile, the People’s Bank of China announced on Thursday that it would cut the reserve requirement ratio for local banks by 25 basis points. It was the second such cut this year and is intended to bring more liquidity to the world’s second-largest economy to boost growth.
Look at other individual values:
General MotorsFord and Stellantis: The United Auto Workers union is on strike at three major US automakers’ factories. The forced production stop is not reflected in stock market values everywhere. General Motors gained 0.83 percent, Ford lost 0.12 percent and Stellantis gained about 2.2 percent. Almost 13,000 workers are on strike; in total, the union represents 146,000 employees from all three companies, according to CNBC.
delta Airlines: The airline warns that high fuel prices will hurt the company’s profits. Now the earnings forecast is $1.85 to $2.05 per share, whereas previously it was $2.20 to $2.50 per share.
The prices increased by 1.45 percent. Earlier this week, American Airlines, Spirit Airlines and Frontier Airlines also warned that the summer quarter would be difficult as higher costs hurt their profits.
JP Morgan: The bank plans to compete more strongly with fintech companies like Square and Paypal by offering digital payroll to small businesses. This announcement resulted in a slight decline of 0.28 percent on the stock market. JP Morgan has selected San Francisco-based fintech firm Gusto to provide the underlying technology for the feature, Gusto CEO Joshua Reeves said.
Nvidia: Competitor Arm’s strong stock market debut and the weak industry environment are weighing on Nvidia shares. They lost 3.69 percent.
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