U.S. stocks are under pressure after a report that said the U.S. could restrict sales of artificial intelligence chips to China, weighing on shares of Nvidia and Advanced Micro Devices.
At 9:40 ET (13:40 GMT), the Dow Jones Industrial Average was down 98 points or 0.3%, while the S&P 500 was down 0.3% and the NASDAQ Composite was down 0.1%.
Both chipmakers were already affected by earlier restrictions on chips made for sale to China. NVIDIA Corporation (NASDAQ:NVDA) was down 1.9% and Advanced Micro Devices Inc (NASDAQ:AMD) fell 1.3%.
Among other chip stocks, Qualcomm Incorporated (NASDAQ:QCOM) fell 2.1% and Marvell Technology Group (NASDAQ:MRVL) fell 0.7%.
It’s a reversal from Tuesday’s rally when rising tech stocks helped the Dow snap a six-day losing streak as investors put recession worries on the back burner.
Fed’s Powell takes stage in Portugal
Federal Reserve Chair Jerome Powell is appearing with other central bank leaders at a conference in Portugal on Wednesday as officials discuss monetary policies.
Investors are awaiting the Fed’s next move on interest rates after stronger than expected economic reports this week leading into Friday’s report on inflation for May. Expectations are that inflation will rise from last year but show a continued cooling from prior months.
Futures traders are factoring in a quarter of a percentage point rate hike when the Fed next meets in July after the Fed paused on rate hikes this month.
Bank stress test results expected today
Bank stocks are a focus today ahead of the Fed’s release of the latest stress test results. The Fed tests the largest U.S. banks annually to see if they have enough capital set aside to withstand severe disruptions in the financial system. The results affect how much capital banks can return to shareholders in the form of dividends and buybacks.
This year’s results are getting extra attention after the failure of three large banks this spring, brought on by deposit runs after the rapid increase in interest rates over the past year.
General Mills forecasts slowing growth
Shares of packaged food giant General Mills, Inc. (NYSE:GIS) dipped 4.6% after it forecast fiscal year adjusted profit growth in the mid-single-digits percentage.
Boeing Co. (NYSE:BA) shares rose 0.6% after it said most of its 737 max fleet in China resumed commercial operation as of end-June.
Oil was sliding. WTI was down 0.5% to $67.39 a barrel, and Brent was down 0.5% to $72.12 a barrel. Gold is down 0.4% to $1,916.
