Nasdaq and S&P500: Tech Stocks Slide on ASML Warning, Dow Gains on Bank Strength

Tech Weakness Pulls Nasdaq and S&P 500 Lower While Dow Gains on Bank Strength

U.S. markets traded mixed in the first hour of Wednesday’s session as tech sector losses, led by ASML, weighed on the Nasdaq and S&P 500. The Dow Jones Industrial Average rose about 0.3%, supported by bank earnings, while the Nasdaq slipped 0.1%. The S&P 500 held near flat, reflecting pressure from semiconductor names.

How Is ASML’s Outlook Hitting the Chip Sector?

ASML shares fell more than 6.5% after the company narrowed its 2025 revenue forecast and said it couldn’t confirm growth in 2026. That overshadowed a second-quarter beat on both top and bottom lines. The Dutch chip-equipment maker reported €7.7 billion in sales and €2.29 billion in profit, surpassing analyst estimates. However, its Q3 guidance of €7.4–€7.9 billion came in below the €8.3 billion consensus.

ASML attributed its caution to macroeconomic and geopolitical uncertainty, particularly the impact of tariffs. The reaction was swift: Marvell, Applied Materials, Lam Research, and Micron dropped between 3% and 5%, dragging down the broader tech space. The S&P tech sector dipped 0.2% early, capping broader market gains.

Can Strong Bank Earnings Keep the Dow Afloat?

Financials provided a cushion. Goldman Sachs and Morgan Stanley beat earnings estimates, though the latter traded lower following its results. Bank of America also topped expectations but slipped slightly as net interest income missed forecasts.

The financial sector gained around 0.2%, bolstered by continued strength from JPMorgan, Citigroup, and Wells Fargo earlier this week.

These results help offset weakness elsewhere, with investors rewarding consistent revenue and capital return over top-line surprises alone.

Does the Latest Inflation Data Support a Rate Cut Narrative?

The June Producer Price Index came in flat month-over-month, undercutting expectations of a 0.2% rise. That followed softer-than-expected consumer inflation data earlier this week and reinforced market hopes for Federal Reserve easing later this year. Still, with inflation above target and labor markets tight, analysts remain divided on timing and size of any rate moves.

Volatility on Deck as Technical Signals Flash Red?

BTIG flagged a cautionary signal: the S&P 500’s streak of closes above its 20-day moving average often precedes sharp volatility spikes. With earnings season heating up and geopolitical headlines in focus, traders should expect wider price swings.

Market Outlook: Cautious Optimism With High Alert

Early action shows sector divergence—strength in banks, weakness in chips. With inflation cooling and Fed policy uncertain, traders should stay nimble.

Upcoming earnings from major tech names and more inflation data could drive decisive moves.

Volatility strategies and earnings-driven setups may offer the most attractive risk-reward in the current tape.

More Information in our Economic Calendar.