US stock futures fell on Wednesday, with contracts on the Nasdaq sinking about 1.2%, the S&P 500 losing 0.7% and the Dow Jones declining about 70 points, led by a tech sell-off after news that the Biden administration is considering using the most severe trade restrictions if companies continue giving China access to advanced semiconductor technology. Megacaps were all in the red in premarket trading: Microsoft (-1.5%), Apple (-1.5%), Nvidia (-3.1%), Amazon (-0.9%), Meta (-1.4%), Alphabet (-0.8%). Broadcom (-2.8%), AMD (-3.2%), Qualcomm (-2.7%) and Intel (-0.5%) also declined. On Tuesday, both the S&P 500 and the Dow rallied to top fresh record levels, with traders continuing to fully price in the Fed will cut the fed funds rate in September. On the earnings front, shares of J&J were down nearly 0.5% after the company lowered its full-year outlook.
The DAX was little changed around the 18520 level on Wednesday, as a tech sector downturn dampened investor confidence after news the US is considering more severe trade restrictions if companies continue giving China access to advanced semiconductor technology. Traders were also digesting further corporate results and awaiting the ECB monetary policy decision due tomorrow. Daimler Truck Holding (-1.8%), Siemens Energy (-1.6%), Hannover Rück (-1.5%), Zalando (-1%) and Rheinmetall (-1%) were the worst performers. In contrast, Adidas was up almost 5% following a raise in its earnings guidance for 2024.
The CAC 40 fell 0.16% to 7,568 on Wednesday, marking its third consecutive session of losses, weighed down by the tech sector, with shares of ASML Holding plunging nearly 6% due to disappointing forecasts for third-quarter sales, despite sales and earnings for Q2 exceeding expectations. Adding to the market's woes, reports surfaced that the US administration is considering stricter trade restrictions if companies continue providing China access to advanced semiconductor technology. Among individual stocks, Essilor was the worst performer, dropping almost 3% following the announcement of two acquisitions, including Supreme from U.S. apparel and footwear group VF Corporation. Publicis shares also declined around 1.7% ahead of its Q2 and first-half results, with expectations of steady organic revenue growth. Meanwhile, investors are eagerly anticipating the ECB's upcoming monetary policy decision scheduled for tomorrow.
The FTSE MIB is falling by 0.3% to hover around the 34,250 mark, aligning with its European peers, with the markets being impacted by news that the US administration is considering imposing more severe trade restrictions on companies that continue to provide China with access to advanced semiconductor technology. Additionally, traders remain cautious ahead of the ECB decision due tomorrow. On the corporate front, Iveco Group (-2.2%), Brunello Cucinelli (-1.6%), Leonardo (-1.5%), and Azimut (-1.4%) are among the top decliners. In contrast, A2a and Saipem are defying the trend, each rising around 1%.
