Stocks fell on Tuesday as investors navigated a batch of disappointing company reports ahead of a key inflation reading.
The S&P 500 fell 0.42% to 4,122.47, while the Nasdaq Composite dropped 1.19% to 12,493.93. The Dow Jones Industrial Average shed 58.13 points, or 0.18%, to close at 32,774.41.
The declines came after memory chipmaker Micron warned that revenue may fall short of its prior guidance because of “macroeconomic factors and supply chain constraints.” The stock fell more than 3%.
It’s been a rough week for chipmakers. On Monday, weaker-than-expected revenue guidance from Nvidia weighed on the group, and those stocks extended their losses on Tuesday.
“These are two big players that I think investors thought were in a better position to navigate through some of these recent supply chain issues. I think there’s concern that this is really going to weigh on tech,” said Ed Moya, senior market analyst at Oanda.
The S&P 500 has climbed for three straight weeks, but earnings season has featured demand warnings from executives of major companies. Investors are watching closely to determine how the Federal Reserve’s fight against inflation is rippling through the economy.
“Everything that we’re getting is [showing] that inflation is having a much harder impact on corporate America outlooks, and that’s why I think this market is going to be difficult to continue to buy equities,” Moya added.
Outside of chips, a pair of Nasdaq-listed stocks also got hit. Novavax slumped nearly 30% after slashing full-year revenue guidance because of poor demand for its Covid vaccines. Upstart declined more than 11% after the consumer lending company reported second quarter results that missed both profit and revenue expectations.
Investors are awaiting the latest reading of the July consumer price index, due Wednesday. The report is expected to show a slight slowdown in inflation, thanks in part to a fall in oil prices, which could inform the market about the next steps for the Federal Reserve.