S&P 500 Futures Little Changed as Banks Report, Chipmakers Fall
US equity futures held firm Tuesday despite a deepening selloff in chipmakers, as traders sorted through a slew of bank results from JPMorgan Chase & Co., Goldman Sachs Group Inc. and other lenders in the start to third-quarter corporate earnings season.
Futures contracts tied to the S&P 500 Index were down less than 0.1% as of 7:50 a.m. in New York, after the benchmark was little changed on Monday near a fresh record. Nasdaq 100 futures fell 0.7%, as a selloff in chipmakers extended for another day. An exchange-traded fund tracking chipmakers tumbled nearly 2% premarket, with Micron Technology Inc. and US-listed shares of SK Hynix Inc. respectively sliding 3.8% and 5.5%. Sandisk Corp. was off 4.5%.
China’s CXMT is narrowing the technology gap with Samsung Electronics, SK Hynix and Micron — the world’s biggest memory chipmakers — raising the prospect of greater competition that could erode the three DRAM giants’ pricing power and market share. Other chip-related shares traded lower. Nvidia Corp. was down 0.8% premarket. Advanced Micro Devices Inc. and Broadcom Inc. fell 1.7% and 1.5%, respectively.
Among other individual stocks, JPMorgan Chase — up just 3.8% this year through Monday — rose 1% premarket despite reporting a surprise drop in fixed-income trading revenue in the third quarter. Goldman Sachs climbed 3.3% after its equities traders blew past expectations in the third quarter. US banking stocks are already in a correction, with the KBW Bank Index down 12% from its mid-August peak.
Citigroup Inc. and Wells Fargo & Co. also report before the open.
“Banks are still willing to lend, spreads are narrowing, and companies are asking for more credit despite elevated rates,” wrote Jeffrey Roach, chief economist at LPL Financial. “Inflation and geopolitical risks could still cloud the outlook, but companies appear willing to look past some of the uncertainty when growth opportunities are good enough.”
See more: The Real Benchmark Isn’t the S&P 500. It’s Your Client’s Plan.
