Article published at 9:30 a.m. CT
JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Samsung says it expects strong 2Q growth
- Tech investors worry about AI spending spree
- VIXN is up 43% on the year
In the on-again, off-again rotational trading episodes that have defined much of the movement through the top three major indices in recent weeks, the spin is back on technology stocks. Chip stocks are tumbling in the early going today after taking over market activity yesterday, pushing all three to the upside, even if was just barely.
But it looks to be a different story today when shares of Samsung tanked after it released strong earnings expectations so far as investor worries about AI spending mounted. The South Korean tech giant said it expects to report a record quarterly profit that will surge roughly 19-fold, but investors were expecting more, prompting a 7% selloff in Seoul. (Major South Korean firms release forecasts ahead of the official earnings release, in Samsung’s case on July 30, the company said.) Keep an eye on those shares, which are up an astonishing 382% year-over-year.
The tech-heavy Nasdaq Composite fell nearly 1% as U.S-based chip makers tumbled early on: Micron shares were off 5.06%, Lam Research tumbled 6.6%, and Western Digital gave up 6.7%, all but erasing yesterday’s gains. Nvidia shares fell 1.6%, and have lost much of their year-to-date gains, sitting today at 3.2%. to the upside Yesterday, Nasdaq was the ringleader then too, but settling higher by 1.12% after a rough two-day stretch last week that erased $1.3 trillion in value.
Chip maker investors should expect continued volatility in market activity. Consider the movement of the Cboe ® Volatility Index compared with the Nasdaq-100 Volatility Index: The VIX ® Index is up 8% but the VIXN has proven much more erratic, up 43% this year.
Speaking of the Nasdaq 100, SpaceX is part of the group as of today. Wall Street analysts, finally able to make calls and set price targets on the stock, are mostly bullish. Shares, however, were down 2.4%.
Shares of Amazon were higher by 1.2% in the early going after Bloomberg reported that the firm was looking to raise $25 billion in a bond sale as it ramps up AI spending.
The Dow Jones Industrial Average could hit another record if its early gains stay on track. Yesterday, the 30-stock index closed at a fresh peak yesterday, crawling up 0.29%, to end at 53,055.91. That marks it first close over 53,000 and the 21st record close. The S&P 500 is heading slightly lower in the early going after edging up 0.72% on Monday.
Oil prices reversed course, moving about 1.2% higher after reports of trouble in the Strait of Hormuz, to roughly $69.62 a barrel.
Happy trading!
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