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Nasdaq Declines More Than 1% as Chip Manufacturers and Mega-Cap Growth Stocks Experience a Decline

Arm Continues Winning Streak Post-IPO, Instacart Boosts IPO Price, Adobe Drops on Notes Offering, Paramount and Warner Bros Soar on Byron Allen's Disney Bid, Indexes Slide: Dow -0.50%, S&P -0.80%, Nasdaq -1.24%

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Sep 15 (The Street Press) – On Friday, the Nasdaq went down by over 1%, leading the drop in the main Wall Street indexes. This happened because companies that make computer chips saw their stock prices fall due to worries about people buying their products. Also, big companies that were growing a lot had their stock prices pushed down because the interest rates on government loans were going up.

Shares of chip equipment manufacturers like Applied Materials, Lam Research, and KLA Corp dropped by approximately 4% each. This happened after Reuters reported that TSMC, a big company that makes computer chips, had asked its main suppliers to wait a bit before sending them the stuff they ordered.

Other companies that make computer chips, like Nvidia, Advanced Micro Devices, Broadcom, and Micron Technology, saw their stock prices go down. They lost between 1.6% and 3.7% of their value. This caused the Philadelphia Semiconductor index to drop to its lowest point in three weeks.

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Adding to concerns about computer chip demand from car companies, the United Auto Workers’ union went on strike at the same time in factories belonging to General Motors, Ford, and the parent company of Chrysler, Stellantis.

Interestingly, even with these strikes happening, the stock prices of these three car companies went up by about 1% each.

To make matters worse, the interest rates on government loans in the U.S. increased. This caused the stock prices of growth-focused companies like Amazon, Meta Platforms, and Microsoft to fall between 1.8% and 2.7%.

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Traders are still pretty sure that the Federal Reserve won’t change interest rates in its September 20 meeting; they’re almost 97% certain. They also think there’s a good chance the Fed will pause in November, with odds at around 67%, according to the CME FedWatch Tool.

Adobe, the company that makes Photoshop, saw its stock price fall by 4.1% to its lowest point in more than two weeks. This happened after they announced a program to borrow up to $3 billion on September 8, right after they shared their third-quarter financial results.

The information technology and consumer discretionary stocks were among the top losers in the S&P 500 sectors, with their stock prices dropping by more than 1%.

SoftBank’s Arm Holdings went up by 1.7% after having a great first day of trading on the Nasdaq. This got people excited about the initial public offering (IPO) market again. Because of Arm’s success, Instacart, a grocery delivery app, increased the price range for its IPO, aiming for a value of up to $10 billion.

However, Neumora Therapeutics, which is supported by Amgen and Japan’s SoftBank, didn’t do as well. When it made its debut, its stock price started at $16.50 per share, which was lower than the IPO price of $17 per share.

Later in the day, the expiration of quarterly derivatives contracts tied to stocks, index options, and futures, commonly known as “triple witching,” is expected to make the markets quite unpredictable.

As of 12:25 p.m. ET, here’s where the major indexes stood:

  • The Dow Jones Industrial Average was down by 174.87 points, or 0.50%, at 34,732.24.
  • The S&P 500 was down by 35.87 points, or 0.80%, at 4,469.23.
  • The Nasdaq Composite was down by 172.92 points, or 1.24%, at 13,753.14.

Paramount Global and Warner Bros Discovery saw gains of 2.4% and 1.7%, respectively, after entrepreneur Byron Allen made a $10-billion bid for Walt Disney’s ABC TV network. Disney’s shares went up by 1%.

On the New York Stock Exchange, there were more stocks declining than advancing, with a ratio of about 2 to 1. The Nasdaq also had more declining stocks than advancing stocks, with a ratio of about 2 to 1.

Regarding 52-week highs and lows:

  • The S&P index had seven new 52-week highs and seven new 52-week lows.
  • The Nasdaq had 35 new 52-week highs but also 143 new 52-week lows.
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Sk Sahiluddin
Sk Sahiluddin
Sk Sahiluddin is a seasoned journalist and media professional with a passion for delivering accurate and impactful news coverage to a global audience. As the Editor of The Street Press, he plays a pivotal role in shaping the editorial direction and ensuring the highest journalistic standards are upheld.
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