US stocks were largely trading lower on Tuesday, July 28, tracking a global selloff in shares of computer chipmakers. Tech heavy Nasdaq index dropped as much as 1.4%, S&P 500 index declined as much as 0.41% while Dow Jones Industrial Average index surged as much as 0.86% tracking a decline in crude oil prices and stronger than anticipated earnings of Coca Cola, Sherwin-Williams and Illinois Tool Works.
Coca-Cola shares climbed nearly 6% after its revenue rose 7% despite what CEO Henrique Braun called “a dynamic consumer landscape.”
Sherwin-Williams rallied 7%, and Illinois Tool Works rose 3.7% after both also reported stronger profits for the latest quarter than analysts expected, according to a report by news agency AP.
Computer chipmakers dropped on Tuesday tracking a global selloff in these shares amid threat from Chinese companies. Shares of Amkor Technology, Sanmina Corporation, Sandisk, Applied Optoelectronics, Micron, Nvidia, AMD, Intel and SK Hynix dropped between 8% and 24%.
Chipmaker shares have been facing selling pressure after the recently listed China’s ChangXin Memory Technologies said that it plans to use the proceeds from the initial public offering (IPO) to boost production and carry out more research and development. The company makes dynamic random-access memory chips that power AI data centres, mobile phones, computers, tablets and other electronic devices.
Sharp drops for SK Hynix and Samsung Electronics dragged South Korea’s KOSPI index down 10.8% earlier on Tuesday. The market’s losses were so big that trading was temporarily halted at times in Seoul.
Meanwhile, Nvidia lost its position as the world’s most valuable company to Apple on Monday after a media report suggested that the AI chip heavyweight was in talks to backstop $250 billion in funding for OpenAI tied to a major data centre project. That report followed a $500 billion strategic collaboration with the conglomerate SK Group, announced on Friday.
Investors were seen taking measured bets ahead US Federal Reserve’s interest rate decision due tomorrow and they will closely monitor Fed Chair Kevin Warsh’s commentary on future path of interest rates, analysts noted.