Nasdaq Composite Plunges 264 Points as Samsung Profit Fails to Impress; Dow Hits Record 53,289 Amid Chip Sell-Off

Mumbai, July 7: US stock markets delivered a mixed performance in Tuesday’s opening session, with technology stocks bearing the brunt of a broad semiconductor sell-off triggered by Samsung Electronics’ quarterly results, while the Dow Jones Industrial Average reached a fresh all-time high.

The Nasdaq Composite (^IXIC) tumbled 264.72 points, or 1.01%, to trade at 25,856.44, extending Monday’s recovery losses. The S&P 500 (^GSPC) declined 25.91 points, or 0.34%, to 7,511.52, while the Dow Jones Industrial Average (^DJI) bucked the trend, edging up 5.71 points, or 0.01%, to 53,061.62, having earlier touched an intraday record of 53,289.30.

Trading volumes reflected cautious sentiment, with the Nasdaq recording 1.54 billion shares and the S&P 500 seeing 343.5 million shares exchanged within the first hour.

Samsung 19-Fold Profit Jump Erases $80 Billion Market Value as AI Spending Fears Resurface

The primary catalyst for Tuesday’s tech rout originated in Asia, where Samsung Electronics (005930.KS) reported a staggering 19-fold increase in second-quarter operating profit to 89.4 trillion won ($58.44 billion), surpassing an LSEG SmartEstimate of 87.3 trillion won and exceeding its combined earnings over the past three years. Revenue was projected to surge 129% year-on-year to 171 trillion won.

Despite smashing earnings expectations, Samsung shares plummeted as much as 10.1% in Seoul before closing 6.92% lower at KRW 68,256, wiping out more than $80 billion in market capitalisation. The sell-off stemmed from investor anxiety over whether US tech giants would sustain their massive artificial intelligence infrastructure spending, potentially curbing future memory chip demand.

Also Read: How to Invest in the US Stocks From India?

Rival SK Hynix (000660.KS) dropped 6%, while South Korea’s KOSPI index tumbled 4.9%, briefly triggering a trading halt after an 8% decline earlier in the session. Samsung’s US-based suppliers also felt the impact, with Lam Research and Applied Materials slipping about 3.7% each in premarket trading.

Semiconductor Bloodbath: Applied Materials Plunges 10%, Intel and AMD Shed Over 7%

The negative sentiment cascaded across US chip stocks during Tuesday’s opening hour, with the VanEck Semiconductor ETF (SMH) falling more than 3%. Among the worst-hit Nasdaq-100 components, Applied Materials (AMAT) led the decline, plunging 10.02% to $536.96, followed by Lam Research (LRCX) which dropped 8.57%, and KLA Corporation (KLAC) which fell 7.94%. Memory chip makers bore the brunt of the selling pressure: Sandisk (SNDK) tumbled 9.62% to $1,577.95, Western Digital (WDC) fell 8.65%, and Micron Technology (MU) declined 7.37%. Intel (INTC) dropped 8.38% to $113.11, while Advanced Micro Devices (AMD) shed 7.35%, and Broadcom (AVGO) declined 1.96%. The sell-off extended to semiconductor equipment suppliers, with Teradyne (TER) falling 8.95% and ASML Holding (ASML) declining 5.36%.

Marvell Technology (MRVL) dropped 7.70%, and Qorvo (QRVO) declined 3.35%. Analysts at Vital Knowledge noted that while Q2 earnings are likely robust, the bar is exceptionally elevated given the S&P 500’s 1,000-point gain since the Q1 reporting season.

Top Gainers and Losers: Maase Jumps 15.68% as Rivian and Applied Materials Drag

Tuesday’s session witnessed sharp divergences across individual stocks. Among the top gainers on the Nasdaq, Maase Inc. (MAAS) surged 15.68% to $17.71 on volume of 37,961 shares, while Agios Pharmaceuticals (AGIO) advanced 14.17% to $42.69 following no specific news. ClearOne (CLRO) gained 29.14% to $9.04, and Sky Quarry (SKYQ) rose 16.98% to $2.48. DigitalOcean Holdings (DOCN) climbed 7.01% to $140.58, and Kingsoft Cloud Holdings (KC) gained 6.68% to $9.74.

In the S&P 500, Gilead Sciences (GILD) rose 4.29%, PepsiCo (PEP) advanced 3.85%, and Johnson & Johnson (JNJ) gained 3.40%. Conversely, the losers’ list was dominated by semiconductor and EV names. Rivian Automotive (RIVN) plunged 13.60% to $17.40 after announcing a public offering, while T1 Energy (TE) fell 12.31% to $7.59. Astera Labs (ALAB) dropped 11.08% to $384.80, and Ultra Clean Holdings (UCTT) declined 9.61% to $95.44.

Among active stocks, Nokia (NOK) fell 2.24% to $12.23, Plug Power (PLUG) declined 1.52% to $2.60, and Nu Holdings (NU) gained 1.07% to $14.21. On the Dow, Caterpillar (CAT) was the worst performer, falling 5.10% to a market cap of $423.897 billion, while Nvidia (NVDA) declined 1.92% to $192.07.

Rivian Slides 13.6% After $1.5 Billion Share Sale and Preliminary Q2 Revenue Figures

Electric vehicle maker Rivian Automotive (RIVN) experienced a sharp decline of 13.60% to $17.40 after announcing a public offering of 75 million shares to raise $1.5 billion for general corporate purposes, including equity contributions for a Department of Energy loan.

The company reported preliminary second-quarter revenue of $1.55 billion to $1.65 billion, up from $1.3 billion a year earlier. A previous version of this blog post misstated Rivian’s preliminary second-quarter revenue forecast. The share sale comes after a hot streak, with Rivian’s stock rising 28% over the previous five trading sessions.

The offering, conducted during extended hours, drew investor scrutiny amid concerns over dilution.

SpaceX Joins Nasdaq-100 Amid Bullish Calls; Morgan Stanley Sets $300 Price Target

Space Exploration Technologies Corp (SPCX) officially entered the Nasdaq-100 index on Tuesday, marking a significant milestone for Elon Musk’s space and AI company. The stock traded 3.70% lower at $154.49, though it had initially opened flat. Despite the decline, Wall Street responded with a flurry of bullish analyst initiations: Morgan Stanley set a price target of $300 on the shares, while Raymond James also initiated coverage with a positive rating.

Wedbush issued an outperform rating with a $190 target. The inclusion means index-tracking funds, including the Invesco QQQ Trust (QQQ), must purchase SpaceX shares and trim other holdings to maintain benchmark alignment. BlackRock launched the iShares Nasdaq 100 ETF (IQQ) on Tuesday with an expense ratio of 0.12%, challenging Invesco’s dominance. SpaceX’s market cap stood near $2.1 trillion at yesterday’s close, though the stock remains 29% off its record high of $225.

This is likely to be the last high-profile index addition for SpaceX for a while, though it may yet become a member of the benchmark S&P 500 someday. The first of a series of SpaceX lock-up expirations lands on the second full trading day immediately following the company’s first earnings release date, expected in late July or early August.

Fiserv Jumps 5% on Potential Payments Infrastructure Sale to Major Banks

Fiserv (FIS) rallied more than 5% to $43.09 following reports from The Wall Street Journal that the fintech company has held discussions with major US banks, including JPMorgan and Bank of America, regarding the potential sale of its payments infrastructure business, which handles debit card transactions.

The development attracted investor interest, with volume surging to 1.11 million shares in early trading, compared to the three-month average of 6.65 million. Fidelity National Information Services (FIS) also gained 4.41%.

Vertex Pharmaceuticals Acquires Crinetics in $10 Billion Deal; Crinetics Shares Double

Vertex Pharmaceuticals (VRTX) announced a $10 billion acquisition of Crinetics Pharmaceuticals (CRNX) to gain access to treatments for rare hormonal diseases. Crinetics shares approximately doubled, jumping 98.67% to $83.50 on volume of 42 million shares, while Vertex dipped nearly 1% to trade at $345.54. The deal represents a significant expansion of Vertex’s pipeline into endocrine disorders and reflects continued consolidation in the biotechnology sector.

First Solar Gains 3% After Deutsche Bank Upgrade Citing Trade Policy Shifts

First Solar (FSLR) rose nearly 3% after Deutsche Bank upgraded the stock to buy from neutral, citing three reasons to purchase shares on weakness. The bank highlighted potential trade policy shifts and the company’s strong position in the solar manufacturing sector as key drivers. The solar module manufacturer’s stock traded at $536.96, recovering some of the prior session’s losses.

Amazon Plans $25 Billion Bond Sale to Raise Capital

Amazon (AMZN) is looking to raise $25 billion in a bond sale, sources told CNBC’s David Faber. Shares of the internet giant gained 0.8% in the premarket and traded at $247.13, up 1.22%. Bloomberg News first reported the news. The bond sale comes as Amazon continues to invest heavily in its cloud infrastructure and artificial intelligence capabilities.

Trade Deficit Widens to $77.6 Billion in May as Exports Drop 3.2% and Imports Rise

The US trade deficit accelerated sharply in May to $77.6 billion, up from a revised $54.6 billion in April, according to Commerce Department data. Economists surveyed by Dow Jones had anticipated $78.08 billion.

Exports fell 3.2%, while imports rose 3.3%, reflecting continued pressure on the US current account balance amid global economic uncertainty. The data preceded Wednesday’s Federal Reserve minutes, which will provide insight into the central bank’s policy deliberations.

Oil Prices Rise Above $69 on Middle East Tensions; Iran Attacks Commercial Ships

Crude oil prices advanced following reports of Iranian attacks on commercial vessels in the Strait of Hormuz, raising concerns about regional stability. According to the Associated Press, a Qatari LNG tanker and a Saudi-flagged crude oil vessel sustained damage, marking the first reported attack on a Qatari LNG ship since the Iran conflict escalated. Brent crude futures (BZ=F) briefly surpassed $73 per barrel, while West Texas Intermediate crude (CL=F) climbed to $69.70 per barrel, gaining 1.85% on the session.

The UK Maritime Trade Operations confirmed a tanker on fire after a projectile strike east of Limah. Energy stocks responded positively: Chevron (CVX) advanced 2.32%, Exxon Mobil (XOM) gained 2.67%, and ConocoPhillips (COP) rose 1.85%. However, Iraq reportedly restored production at three key oil projects to full capacity, while OPEC+ members agreed to increase production quotas for next month, reinforcing expectations of stronger global supply.

Treasury Yields and Dollar Strengthen Ahead of Fed Minutes; 10-Year Yield at 4.5%

US Treasury yields edged higher ahead of Wednesday’s release of Federal Reserve meeting minutes, which will offer clues on the central bank’s policy trajectory under new Chairman Kevin Warsh. The 10-year Treasury yield rose to 4.5%, while the 30-year yield stood at 5.01%, gaining 0.32% on the session. The US dollar index advanced as markets continued pricing in another potential rate hike before year-end, though expectations eased following June’s sharp slowdown in hiring, which signalled labour market pressure despite recent resilience.

Futures Market Indicates Weak Start; Nasdaq Futures Down 0.8%

US stock futures pointed to a weak start on Tuesday as artificial intelligence-related stocks came under pressure. Futures tied to the S&P 500 were down 0.2%, while Dow Jones Industrial Average futures edged 0.1% higher.

Nasdaq futures fell 0.8%, indicating that Monday’s rebound on Wall Street was losing momentum. In the previous session, all three major US indices ended in positive territory, with the Dow Jones Industrial Average closing above the 53,000 mark for the first time.

Trump Rings Opening Bell from Oval Office to Launch Trump Accounts Programme

In a first-of-its-kind event, US President Donald Trump rang the opening bells for the New York Stock Exchange and the Nasdaq from the Oval Office, marking the launch of the Trump Accounts programme aimed at encouraging long-term investing among American children.

The symbolic ceremony comes as Trump continues to spotlight the stock market as a barometer of the US economy ahead of the November mid-term elections. US Treasury Secretary Scott Bessent stated that the initiative seeks to expand participation in equity markets by increasing access for households that currently have little or no direct exposure to stocks. “38% of American families do not have any exposure to our great equity markets, but with Trump Accounts, over time, we can get that number to zero,” Bessent said.

DeepSeek Developing Own AI Chip, Potentially Reducing Nvidia Dependency

Reuters reported, citing sources, that Chinese AI company DeepSeek is developing its own AI chip. The push could cut the company’s dependency on semiconductors from companies such as Nvidia and Samsung. Shares of Nvidia were more than 1% lower following the report. The development adds to concerns about the sustainability of AI chip demand and could impact the broader semiconductor ecosystem in the long term.

Key Earnings and Economic Data to Watch This Week

Market participants will focus on Wednesday’s Federal Reserve minutes, which will provide clarity on monetary policy direction under Chairman Warsh. The ADP weekly employment change for the week ended June 20 will be released, with previous figures showing an increase of 30,750. Additionally, import and export data for May will offer further insight into global trade flows. On the earnings front, Delta Air Lines and PepsiCo are scheduled to report this week, potentially offering fresh perspectives on the health of the US consumer. Penguin Solutions (PENG) will report earnings after Tuesday’s market close, with the stock trading at $61.92, down 8.55% on the session. Bitmine Immersion Technologies (BMNR) will also report earnings after the market close.

The Nasdaq’s decline of 264.72 points highlights growing investor caution over semiconductor valuations following Samsung’s results, despite the company’s strong profit growth. The Dow’s record high indicates continued rotation into defensive sectors and value stocks. Oil prices above $69 per barrel amid Middle East tensions suggest heightened geopolitical risk premium. Federal Reserve minutes on Wednesday will provide clarity on monetary policy direction. Key earnings from Delta Air Lines and PepsiCo will offer insights into consumer spending trends.

Source

• https://www.nasdaq.com/

• spglobal.com/spdji/en/indices/equity/sp-500/

• https://www.dowjones.com/