The semiconductor industry took a hit in premarket trading as some of the largest chip stocks experienced declines. This was attributed to a Bloomberg News report suggesting that the Biden Administration is considering imposing stricter trade restrictions in response to concerns about U.S. companies granting China increased access to domestic semiconductor technology. Nvidia, Taiwan Semiconductor, and AMD were among the companies affected, with Nvidia dropping by 4.4% and Taiwan Semiconductor and AMD declining by 4.7% and 4.1%, respectively. In addition to individual stock drops, ASML, a semiconductor equipment provider, saw its shares sink by over 8%. These losses overshadowed ASML’s better-than-expected quarterly results, leading to a nearly 4% decrease in the VanEck Semiconductor ETF (SMH).
Discount retailer Five Below experienced a significant drop in its stock price, plummeting more than 15%, following the announcement of a slashed second-quarter outlook and the departure of CEO Joel Anderson. This news sparked downgrades from several Wall Street firms, including Evercore ISI, Morgan Stanley, Truist, and Mizuho Securities.
On a positive note, US Bancorp saw its stock rise by more than 1% after reporting second-quarter earnings that surpassed expectations. With earnings per share of 97 cents, compared to a StreetAccount estimate of 94 cents per share, the bank outperformed analysts’ predictions.
In contrast, freight company J.B. Hunt Transport Services experienced a decline of approximately 3% after its second-quarter results fell short of Wall Street’s estimates. Despite reporting earnings of $1.32 per share on revenue of $2.9 billion, analysts had anticipated a profit of $1.48 per share and $3 billion in sales. The company cited increased insurance and equipment costs, despite efforts to reduce operating expenses.
V.F. Corporation’s stock price surged by 6.8% following the announcement of EssilorLuxottica’s agreement to acquire the Supreme brand from V.F. Corporation for $1.5 billion in cash. The transaction is expected to close by the end of 2024.
Despite slipping more than 3% in premarket trading, Omnicom Group reported stronger-than-expected second-quarter revenue. The corporate communications company achieved earnings of $1.95 per share, in line with analyst forecasts, and revenue of $3.85 billion, which exceeded the predicted $3.83 billion.
DevOps software company GitLab witnessed a significant increase in its stock price, soaring more than 14%, following reports that the company was exploring a sale after receiving acquisition interest from firms, including Datadog. Conversely, Datadog’s shares slipped by over 3% amid the news.
Shares of Johnson & Johnson experienced a marginal decline in premarket trading after the company provided disappointing full-year earnings guidance. With a revised earnings per share range of $9.97-$10.07, down from the previous guidance of $10.57-$10.72, Johnson & Johnson fell short of analysts’ expectations, who had anticipated guidance around $10.45 per share.
Premarket trading revealed a mixed bag of results for various companies in different sectors, highlighting the volatility and unpredictability of the stock market. From chip stocks facing pressure due to regulatory concerns to companies surpassing earnings expectations and facing acquisition interests, the stock market continues to be subject to various market forces that can impact stock prices significantly.