Wall Street falls on rising US-China tensions, Caterpillar stocks weigh

  • Speaker Nancy Pelosi is expected in Taipei later today
  • Caterpillar falls after missing sales estimates
  • Uber wins after positive cash flow report
  • Indices down: Dow 0.92%, S&P 0.61%, Nasdaq 0.45%

Aug 2 (Reuters) – Wall Street’s major indices fell Tuesday on concerns over rising US-China tensions ahead of US House Speaker Nancy Pelosi’s arrival in Taiwan, with losses in industrial clock tower Caterpillar magnified the decline even further.

Shares of chipmakers with high exposure to China fell, while Caterpillar (CAT.N) fell 3.6% as the slowdown in construction activity in the world’s second largest economy and a cessation of Russian operations exacerbated problems in the supply chain worsened. read more

“Chip stocks are really exposed to Asia. Some of them have 70% of their sales, especially chip equipment companies, in that region, so it’s a big deal for them,” said Jack DeGan, chief investment officer at Harbor Advisory.

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The latest geopolitical uncertainty comes as financial markets grapple with the fallout from the war in Ukraine, an energy crisis in Europe, rising inflation and tightening financial conditions.

“Any geopolitical concern could lead to traders who gained quite a bit last week taking a little bit (profit) off the table.”

The CBOE Volatility Index (.VIX), also known as the Wall Street fear meter, rose to 24.31 points, its highest level in nearly a week, and the Philadelphia SE Semiconductor Index (.SOX) fell 1%.

At 10:16 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 301.47 points or 0.92% at 32,496.93, the S&P 500 (.SPX) fell 25.27 points or 0.61% at 4,093.36 and the Nasdaq Composite (.IXIC) fell 56.02 points, or 0.45%, to 12,312.95.

In individual stocks, DuPont de Nemours (DD.N) fell 1.4% after the industrial materials maker lowered its full-year outlook, while shares of credit rating agency S&P Global Inc (SPGI.N) fell 2.6% fell after a bleak 2022 earnings forecast. Read more

Uber Technologies Inc (UBER.N) rose 14.1% after the ride-hailing company first reported positive quarterly cash flow and forecast optimistic third-quarter operating profit. read more

Pinterest Inc (PINS.N) rose 13.3% as activist investor Elliott Investment Management became the digital pinboard company’s largest shareholder. read more

Meanwhile, data showed that job vacancies in the US fell more than expected in June, suggesting that labor demand has begun to cool, which could ease pressure on the Federal Reserve to aggressively raise interest rates. read more

The US central bank has raised interest rates by 2.25 percentage points this year and has vowed to be data-driven in its approach to future rate hikes.

The number of declining issuances surpassed the avant-garde by a 1.90-to-1 ratio on the NYSE and a 1.11-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 30 new lows, while the Nasdaq recorded 21 new highs and 41 new lows.

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Reporting by Aniruddha Ghosh and Devik Jain in Bengaluru; Editing by Anil D’Silva and Arun Koyyur

Our Standards: The Thomson Reuters Trust Principles.

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