NEW YORK (dpa-AFX) – The New York stock exchanges extended their losses during trading on Wednesday. New threats from US President Donald Trump against Iran after mutual attacks by both countries weighed on sentiment and caused oil prices to rise sharply. Trump expressed dissatisfaction with the ongoing negotiations and announced an imminent new attack despite the formal ceasefire.
The NASDAQ 100, which had already been weak the day before, came under additional pressure due to further profit-taking in the hot semiconductor sector. Early moderate gains according to inflation data did not last: the technology-heavy selection index turned negative and recently lost 1.28 percent to 28,711 points.
The market-wide S&P 500 fell by 1.02 percent to 7,311 points. The leading index Dow Jones Industrial fell by 1.34 percent to 50,191 points. On Tuesday it was the only major index that narrowly made it into positive territory.
The consequences of the Iran war are further fueling inflation in the USA – in May the inflation rate climbed above four percent for the first time in three years. However, analysts had already expected another strong increase after April.
For the new head of the US Federal Reserve, Kevin Warsh, the inflation development is unpleasant, but probably not a convincing reason for a more restrictive monetary policy course, wrote Johannes Mayr, chief economist at Eyb & Wallwitz Vermögensmanagement. However, he also rejected hopes of easing, because “the arguments for the interest rate cuts that Warsh has so far promised remain at least as weak as those for rapid interest rate increases.” The monetary authorities are therefore likely to stick to their wait-and-see approach.
The mood in the technology industry remains nervous. Market observers assume that the record IPO of space company SpaceX scheduled for Friday could drain liquidity from the sector. According to the Bloomberg news agency, demand for the securities is more than four times higher than supply.
Above all, investors remained at a distance from the chip and AI stocks, which had been doing very well for a long time. The shares of the semiconductor manufacturers QUALCOMM and Broadcom fell by a further 6 and 3.8 percent respectively. The AI chip giant NVIDIA once again held up comparatively well with a share price decline of 2.6 percent.
The shares of Super Micro (Super Micro Computer) collapsed by around 20 percent. The group wants to raise seven billion US dollars through capital market transactions to purchase components in order to meet customer demand for the company’s AI servers.
At Oracle, investors were fickle before the quarterly figures due after the trading session. Most recently, the software manufacturer’s shares were down 0.6 percent./gl/men