Chip stocks under pressure, pharmaceuticals rise: Morning Brief
On today's episode of Morning Brief, hosts Seana Smith and Madison Mills break down the market open and some of the biggest stories hitting the market.
The major market averages (^DJI, ^IXIC, ^GSPC) are under pressure Wednesday morning, with the Nasdaq Composite falling by over 300 points — or over 1.6% — as semiconductor stocks drag down the tech-heavy indexes. As a new report from Bloomberg outlines the Biden administration's plans for stricter trade regulations on chip exports to China, Principal Asset Management chief global strategist Seema Shah explains:
"In a way, this is not unexpected. I think everyone has been anticipating that,as you see this continuation of US-China tensions, that, unfortunately, some of these chip makers, technology almost falls right into the spotlight." However, InsingerGilissen senior analyst Jos Versteeg believes ASML (ASML) will continue to perform well despite the news, saying, "When you look at China, China semiconductor manufacturing, they are using mainly low-end chips and the US wants them to keep on producing low-end chips because the world needs it."
Meanwhile, the US political landscape is heating up. In a recent Bloomberg interview, former President Donald Trump said he would allow Federal Reserve Chair Jerome Powell to complete his term if reelected, as long as Trump thinks Powell is "doing the right thing." However, Trump doesn't think the Fed should cut rates before the election in November because that could help President Biden's reelection prospects.
Tesla (TSLA) CEO Elon Musk, who recently backed Trump in the 2024 election, announced on X, formerly Twitter, that he plans to relocate the headquarters of both SpaceX and X to Austin, Texas. This move is in response to a new California law regarding transgender rights in schools, bringing increased rhetoric to some of the biggest issues dominating the November election.
Johnson & Johnson (JNJ) posted its second quarter earnings Wednesday morning, beating estimates on its top and bottom lines. However, the pharmaceutical giant slashed its full-year profit forecast. Shares of Roche (ROG.SW) are also moving higher on Wednesday as the company reported positive results from its obesity drug trial for a once-a-day oral pill currently labeled CT-996.
This post was written by Melanie Riehl