Stock Rally Falters on Chipmaker Selloff, Economic Data Mixed

A market rally that had pushed stocks to near all-time highs has stumbled, as a selloff in chipmakers worldwide has raised concerns about the industry driving the bull market.

Semiconductors Under Pressure

Semiconductor stocks have come under significant pressure across the globe, including in the US, Europe, and Asia. Major American powerhouses Nvidia Corp., Advanced Micro Devices Inc., and Broadcom Inc. have all seen their shares decline.

SK Hynix Results Fuel Concerns

The rout began after SK Hynix Inc.'s results left investors questioning the sustainability of demand for artificial intelligence (AI) applications. Concerns have spread to Europe, with ASML Holding NV also falling amid worries over potential US export controls.

Economic Data Mixed

On the economic front, data showed an increase in the number of Americans receiving unemployment benefits, reaching a three-year high. First-time unemployment insurance claims also edged higher.

Market Movements

* S&P 500: -0.1%
* Nasdaq 100: -0.5%
* Dow Jones Industrial Average: +0.1%
* Bloomberg Magnificent Seven Mega-Caps: -0.3%
* Philadelphia Stock Exchange Semiconductor Index: -2%
* Russell 2000 Index: -0.5%

Corporate Highlights

* American Airlines Group Inc. forecasts a surprise first-quarter loss, hindering efforts to recover corporate travel.
* Alaska Air Group Inc. beats estimates and provides a positive outlook, boosting plans for overseas expansion.
* Electronic Arts Inc. misses bookings estimates, impacting holiday video game sales.
* General Electric Co. exceeds profit and sales targets as the jet engine maker addresses supply chain limitations.
* Union Pacific Corp. reports strong earnings, affirming its 2025 outlook despite economic uncertainty.
* Freeport-McMoRan Inc.'s copper sales projections fall short of estimates, overshadowing better-than-expected results.
* Elevance Health Inc. benefits from lower medical costs, meeting profit expectations.

Upcoming Events

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* Eurozone Manufacturing & Services PMI (Friday)
* US University of Michigan consumer sentiment, existing home sales, and S&P Global Manufacturing & Services PMI (Friday)