On Tuesday Eastern Time, the three major U.S. stock indices closed lower collectively. ASML's early release of its financial results significantly underperformed expectations, dragging down the entire semiconductor sector and causing the technology-heavy Nasdaq to fall by more than 1%.
According to ASML's official financial report schedule, the company was originally scheduled to release its financial report on Wednesday morning (afternoon Beijing time) and hold a conference call to interpret the results. ASML explained that a technical glitch caused the company's third-quarter financial report to be disclosed a day earlier.
Specifically, ASML announced that its orders for the third quarter of this year were only 2.6 billion euros, nearly half of the market's expectation of 5.4 billion euros. In addition, the company estimates that by 2025, total net sales will grow to between 30 billion and 35 billion euros, while the market generally predicts 35.8 billion euros.
ASML CEO Christophe Fouquet said, "Although artificial intelligence still has strong development and upward potential, other sub-markets will take longer to recover. It now appears that economic recovery is slower than previously expected. This situation is expected to continue until 2025, leading to a cautious attitude among customers."
After ASML released its financial report, investors rushed to sell U.S. chip stocks, causing the Philadelphia Semiconductor Index to record the largest single-day drop since early September (5.3%), and ASML's listed shares in the United States plummeted by 16%.
Analyst Michael Rogge from Degroof Petercam Bank said he expected ASML's warning to drag down the entire industry, but he pointed out that the company's sales are expected to grow from 2024 to 2025. "Despite the downturn in the chip end market, equipment demand has not declined."
Kevin Gordon, a senior investment strategist at Charles Schwab, said, "The main market pressure is concentrated on the semiconductor sector, which brings downward pressure to the entire technology industry."
However, although Gordon believes that the financial report's underperformance is an excuse for selling chip stocks, he is encouraged that the number of rising and falling stocks in the Nasdaq is roughly equal, and Tuesday was not a general decline.
Dan VantRobski from Janney Montgomery Scott pointed out, "Due to the acceleration of the earnings season, the U.S. stock market saw profit-taking today, especially in the large-cap dominated market, and the charts of these stocks show signs of overbought or extension."
Market dynamicsAs of the close, the Dow Jones Industrial Average fell 324.80 points, or 0.75%, to 42,740.42; the Nasdaq Composite dropped 187.10 points, or 1.01%, to 18,315.59; the S&P 500 index declined 44.59 points, or 0.76%, to 5,815.26.
Among the 11 major sectors of the S&P 500, the energy sector closed down 3.04%, the information technology/technology sector fell 1.79%, the healthcare sector dropped 1.24%, the financial sector ended up 0.26%, and the real estate sector rose 1.23%.
U.S. industry ETFs closed mixed, with Regional Banks ETF up over 1%, Banking ETF nearly 1% higher, and Consumer Staples ETF, Utilities ETF, and Global Airlines ETF each up by about 0.5%. Meanwhile, Semiconductor ETF fell over 5%, Energy Sector ETF dropped more than 3%, Technology Sector ETF and Global Technology ETF each fell by about 2%, and Healthcare ETF declined over 1%.
Performance of Popular Stocks
Most large-cap technology stocks fell, with Nvidia down over 4%, Intel down over 3%, and Netflix, Microsoft, Meta, etc., experiencing minor declines; Apple rose over 1%, while Tesla, Google, and Amazon saw minor increases.
UnitedHealth Group plummeted over 8% after the health insurance company projected profits for 2025 to be below Wall Street expectations.
Walgreens surged nearly 16% after the company reported fourth-quarter adjusted profits slightly above market expectations and announced plans to close 1,200 stores to cut costs.
Due to a significant drop in oil prices, energy stocks普遍 declined, with Occidental Petroleum down 4.36%, Marathon Oil down 3.93%, Schlumberger down 3.91%, and Exxon Mobil down 3.01%.
Corporate News
[Apple Releases iPad Mini 7, Now Available for Pre-order]On Tuesday evening Beijing time, Apple officially introduced the iPad mini 7 through an official website press release. Like the latest generation iPhone 16 and 16 Plus, due to the use of "Apple Intelligence," the parameters of this generation of iPad mini have all been enhanced according to the minimum requirements of "running AI." In terms of upgrades, compared to the previous generation, the iPad mini 7's chip has been upgraded from the A15 (iPhone 13 Pro) to the A17 Pro (the one in the iPhone 15 Pro Max, but with one GPU core removed). The CPU and GPU performance have been increased by 30% and 25%, respectively, with hardware-accelerated ray tracing, and the processing speed of neural networks has doubled. Additionally, due to the need to run AI, although the official statement did not mention it, it is reasonable to infer that the memory will double from 4GB to 8GB.
【United Airlines' Adjusted Earnings Per Share for the Third Quarter Exceed Expectations】
United Airlines' adjusted earnings per share for the third quarter were $3.33, with analysts expecting $3.07; third-quarter revenue passenger miles were 69.55 billion, with analysts expecting 70.2 billion; third-quarter PRASM was $0.1663, a year-over-year decline of 2.4%; third-quarter passenger revenue was $13.56 billion, with analysts expecting $13.5 billion; third-quarter operating income was $14.84 billion, with analysts expecting $14.72 billion; third-quarter available seat miles were 81.54 billion, with analysts expecting 81.16 billion; a $1.5 billion share buyback was initiated, marking the company's first since 2020.
【LVMH Group's Third-Quarter Organic Sales of Fashion and Leather Goods Fall Short of Expectations】
LVMH Group's organic sales of fashion and leather goods fell by 5% in the third quarter, with expectations for a 0.48% increase; third-quarter organic sales of wine and spirits fell by 7%, with analysts expecting a 2.41% decline; third-quarter revenue was €19.08 billion, with analysts expecting €20.05 billion; the slight decline in third-quarter revenue is mainly attributed to the slowdown in Japan's growth rate.
【Blackstone Group Plans to Invest €7.5 Billion in Developing Data Centers in Spain】
The American private equity investment firm Blackstone Group plans to invest €7.5 billion ($8.2 billion) in developing data centers in Aragon, Spain. A spokesperson for the regional government of Aragon stated on October 15th that, to date, 19 data center projects have been submitted to the local government for approval.
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