Closing Bell: Semis Sink, Stocks Diverge at Height of Earnings Season

U.S. stocks were mixed Tuesday: chip stocks lagged but some companies reporting earnings regained footing as oil prices declined further.

The S&P 500 (SPX) rose +0.22%, while the Nasdaq-100 (NDX) fell 0.98% and is near correction territory at almost 10% off of recent highs. The Dow Jones Industrial Average index ($DJI) was up 1.03%, while the small-cap Russell 2000 (RUT) rose 0.2%.

The dive in crude is a support for markets; the U.S. benchmark fell more than 4% on Tuesday to roughly $79 per barrel and is down more than 12% this week. Optimism, for now, centers on Iran discussing the Strait of Hormuz with Saudi Arabia and Oman, according to reports.

Three themes from Tuesday’s trading session:

The Travails of the Chip Sector Continue: Dutch chip-tool maker ASML Holding (ASML) slid 3.6% on top of a nearly 6% drop Monday after reports that a Chinese state-backed company was mass-producing a chip-making tool that ASML has long monopolized. Semiconductor equipment company KLA Corp (KLAC) slumped into the close and was under pressure in aftermarket trading despite strong earnings and revenue, according to reports. NAND Flash memory chip and data -storage giant SanDisk (SNDK) was the biggest decliner in the S&P 500, down more than 14% Tuesday as the chip stock selloff deepened. Micron (MU) fell nearly 9%. The VanEck Semiconductor ETF (SMH) fell 3.4% Tuesday to its lowest level since early May, putting it in Bear Market territory at 21% below its all-time high in June.

Earnings Season is a Mixed Bag: In a recurring theme this earnings season, good news for the current quarter from Corning Inc. (GLW) was not enough to withstand disappointing management projections. GLW shares slumped 12 %, one of the biggest decliners in the S&P 500, after underwhelming guidance overshadowed better-than-expected second-quarter earnings. Conversely, Boeing (BA) rose nearly 5% on higher revenue, positive free cash flow, and increased jet deliveries, despite reporting a wider-than-expected quarterly loss. Among the many big companies reporting results, PayPal Holdings (PYPL) was up 4%, The Coca-Cola Company (KO) was up 5%, and The Sherwin-Williams Company (SHW) climbed more than 8%.

There Are Bright Spots in Tech: Apple (AAPL) rose 0.94% to an all-time high after briefly hitting a $5 trillion market cap. Apple announced Apple Upgrade, a new leasing program in partnership with Klarna Group plc (KLAR), up 1.2%. The arrangement gives eligible customers the option to pay for Apple products through monthly installments. In other headlines, Meta Platforms Inc. (META) and BlackRock Inc. (BLK) plan to build a 1-gigawatt data center complex in El Paso, Texas with a development price tag of an estimated $14 billion.

Thomas White and Angrej Singh contributed to this article

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