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Nasdaq slides 1% as chipmaker Micron’s warning rekindles tech rout

The tech-heavy Nasdaq fell on Tuesday after a dismal forecast from Micron Technology dragged chip and technology stocks lower, while markets remained on the edge ahead of inflation data that will feed into the U.S. Federal Reserve’s rate-hike plans.


A high inflation print on Wednesday, following last week’s strong jobs numbers, will likely push the Fed to continue with aggressive rate hikes and weigh on a recent recovery in stocks.

Traders see a 70% chance of the Fed raising interest rates by 75 basis points in September, its third such big hike. IRPR


Adding to concerns around a tight labor market and inflation, data showed U.S. worker productivity fell sharply in the second quarter and on an annual basis posted a record decline.


The tech-heavy Nasdaq fell on Tuesday after a dismal forecast from Micron Technology dragged chip and technology stocks lower, while markets remained on the edge ahead of inflation data that will feed into the U.S. Federal Reserve’s rate-hike plans.


A high inflation print on Wednesday, following last week’s strong jobs numbers, will likely push the Fed to continue with aggressive rate hikes and weigh on a recent recovery in stocks.

Traders see a 70% chance of the Fed raising interest rates by 75 basis points in September, its third such big hike. IRPR


Adding to concerns around a tight labor market and inflation, data showed U.S. worker productivity fell sharply in the second quarter and on an annual basis posted a record decline.


“It’s utterly discounted,” said Michael Shaoul, chief executive officer at Marketfield, on why chip stocks were unfazed by the bill.


Shaoul said trading volumes remained low due to summer and “it really doesn’t take a lot of capital to push over yields or the S&P”.


Rate-sensitive growth and technology stocks slipped as U.S. Treasury yields climbed, with megacaps such as Alphabet Inc GOOGL.O and Tesla Inc TSLA.O down more than 1% each. US/


At 11:41 a.m. ET, the Dow Jones Industrial Average .DJI was down 7.49 points, or 0.02%, at 32,825.05, the S&P 500 .SPX was down 12.96 points, or 0.31%, at 4,127.10, and the Nasdaq Composite .IXIC was down 138.44 points, or 1.09%, at 12,506.02.


Despite a choppy recovery since mid-June, the benchmark index .SPX is down 13.5% this year after hitting a record high in early January as surging prices, hawkish central banks and geopolitical tensions weigh.


Stronger-than-expected earnings from corporate America have been a positive, with 77.5% of S&P 500 companies beating earnings estimates, according to Refinitiv data as of Friday.


U.S. vaccine maker Novavax NVAX.O slumped 28.9% after it halved its annual revenue forecast as it does not expect further sales of its COVID-19 shot this year in the United States amid a global supply glut and soft demand.


Declining issues outnumbered advancers for a 1.80-to-1 ratio on the NYSE and a 2.46-to-1 ratio on the Nasdaq.


The S&P index recorded three new 52-week highs and 30 new lows, while the Nasdaq recorded 36 new highs and 43 new lows.

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