Stocks Retreat as ASML and Nvidia Are Getting Hit: Markets Wrap

(Bloomberg) — Stocks fell after a rally that drove the market to all-time highs as chipmakers fell and a plunge in oil dragged down energy producers.

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The S&P 500 halted a two-day advance. US-traded shares of ASML Holding NV tumbled 14% after third-quarter bookings missed estimates and the company cut its 2025 guidance. Nvidia Corp. lost 4% on a news report that Biden administration officials have discussed capping sales of advanced AI chips from the company and other American firms on a country-specific basis.

Investors are getting so bullish that it might be time to sell global stocks, according to an investor survey by Bank of America Corp. Allocations to stocks surged, while bond exposure sank and cash levels in global portfolios fell to 3.9% in October from 4.2% last month, triggering a “sell signal”, strategists led by Michael Hartnett wrote on Tuesday.

“Equity markets have rallied solidly over the last week amid a combination of earnings optimism and soft-landing hopes,” said Tom Essaye at The Sevens Report. “If any of the economic data, Fed chatter, or earnings results damage either of those narratives, expect some mild profit taking in equities today.”

The S&P 500 slipped 0.4%. The Nasdaq 100 fell 1.2%. The Dow Jones Industrial Average fell 0.4%. Bank of America Corp. climbed 1.5% as earnings topped estimates. Goldman Sachs Group Inc. and Citigroup Inc., which also reported solid results, retreated.

Treasury 10-year yields declined six basis points to 4.04%. Oil sank 5% after a report that Israel may avoid targeting Iran’s crude infrastructure eased concerns over a major supply disruption.

UBS Group AG is upgrading its outlook for US equities once again for this year and next, citing strength in corporate earnings and risks that are skewed to the upside, from easing inflation to interest-rate cuts by the Federal Reserve.

The team led by Jonathan Golub and Patrick Palfrey lifted year-end targets on S&P 500 to 5,850 in 2024 and 6,400 in 2025 from 5,600 and 6,000, respectively.

“Fiscal and monetary policy uncertainty, and potential election outcomes, make 2025 returns far from certain,” strategists wrote.

Corporate Highlights:

• Charles Schwab Corp. reported earnings per share that topped analyst estimates and said it cut some of its expensive debt.

• PNC Financial Services Group Inc. pulled in more net interest income than analysts expected in the third quarter, another period of sequential growth for the bank’s biggest source of revenue as the firm continues to predict a record haul next year.

• Boeing Co. prepared to raise much as $25 billion in debt and equity, giving the troubled planemaker the financial resources to withstand a paralyzing strike and work its way through a series of operational setbacks.

• Johnson & Johnson reported stronger-than-expected third-quarter earnings, driven by surging sales of cancer medicine Darzalex.

• Walgreens Boots Alliance Inc. plans to close 14% of its US store fleet as part of ongoing strategy to cut costs as consumers pull back spending.

• UnitedHealth Group Inc. lowered the top end of its forecast, a rare move for the insurance giant that has often withstood pressures that hurt its competitors.

Story continues

Key events this week:

• Morgan Stanley earnings, Wednesday

• ECB rate decision, Thursday

• US retail sales, jobless claims, industrial production, Thursday

• Fed’s Austan Goolsbee speaks, Thursday

• China GDP, Friday

• US housing starts, Friday

• Fed’s Christopher Waller, Neel Kashkari speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.4% as of 10:41 a.m. New York time

• The Nasdaq 100 fell 1.2%

• The Dow Jones Industrial Average fell 0.4%

• The Stoxx Europe 600 fell 0.7%

• The MSCI World Index fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro was little changed at $1.0899

• The British pound rose 0.2% to $1.3083

• The Japanese yen rose 0.5% to 148.96 per dollar

Cryptocurrencies

• Bitcoin fell 0.4% to $65,657.01

• Ether fell 1.9% to $2,572.39

Bonds

• The yield on 10-year Treasuries declined six basis points to 4.04%

• Germany’s 10-year yield declined five basis points to 2.22%

• Britain’s 10-year yield declined six basis points to 4.17%

Commodities

• West Texas Intermediate crude fell 5% to $70.12 a barrel

• Spot gold rose 0.3% to $2,657.36 an ounce

This story was produced with the assistance of Bloomberg Automation.

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