Markets Slide on Semiconductor Weakness and Trade Risks
US stock indexes ended lower on Wednesday: the S&P 500 dropped 0.53%, the Dow Jones fell 0.71%, and the Nasdaq 100 lost nearly 1%. The market faced broad selling pressure after Texas Instruments issued a weak Q4 revenue forecast, triggering a selloff across the chip sector.
Netflix plunged more than 9% after reporting Q3 EPS of $5.87 versus the expected $6.94. However, some companies offered positive surprises: Intuitive Surgical jumped 13% after raising its full-year forecast for Da Vinci procedures, while Capital One rose 1% after reporting strong earnings.
Trump Renews Tariff Threats Against China
Markets came under additional pressure in the afternoon after Reuters reported that the Trump administration may impose broad restrictions on software exports to China in retaliation for Beijing’s curbs on rare earth exports.
President Trump reiterated his threat to raise tariffs if no trade deal is reached by November 1. He is expected to meet Chinese President Xi Jinping next week on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, a key event that could shape market sentiment.
Macro Headwinds Add to Investor Concerns
The ongoing US government shutdown, now in its fourth week, continues to weigh on markets. Key economic reports — including employment and inflation data — have been delayed. Bloomberg estimates that about 640,000 federal workers have been furloughed, which could push the unemployment rate to 4.7%.
Meanwhile, markets are pricing in a 97% probability of a 25-basis-point rate cut at the Federal Reserve’s October 28–29 meeting, reflecting expectations of continued monetary easing.
Treasury Yields Decline as Investors Seek Safety
Amid equity weakness, demand for safe-haven assets lifted Treasuries. The 10-year yield fell to 3.95%. In Europe, bond markets showed mixed performance — German yields edged slightly higher, while UK gilt yields fell to a six-month low.
UK inflation slowed to 3.8%, reinforcing expectations of looser monetary policy ahead. ECB Vice President Luis de Guindos said the current rate levels are appropriate and inflation risks appear balanced.
Company Highlights: From Netflix’s Miss to Intuitive Surgical’s Surge
Semiconductor stocks were among the weakest performers, with Texas Instruments leading declines, followed by AMD, Intel, Marvell, and Micron, which all lost between 3% and 5%. Netflix dropped over 10%, while Lennox International and AST SpaceMobile also slumped after cutting forecasts and announcing new debt offerings.
On the upside, Intuitive Surgical (+13%), Avery Dennison (+9%), Hilton (+3%), and Amphenol (+3%) rallied after strong results and raised guidance. The energy sector also advanced as WTI crude gained more than 2%, lifting Halliburton, Marathon Petroleum, Chevron, and Exxon Mobil.
Outlook
Despite the recent volatility, earnings fundamentals remain moderately positive. Over 85% of S&P 500 companies have beaten earnings expectations — the best rate since 2021 — suggesting room for recovery if geopolitical tensions ease. However, weak results from tech giants and the prolonged government shutdown may limit near-term upside.