Investing.com-- U.S. stocks traded in a mixed fashion Wednesday, with heavyweight technology stocks seeing a sustained pullback on raised geopolitical tensions.
At 09:55 ET (13:55 GMT), Dow Jones Industrial Average rose 60 points, or 0.1%, while S&P 500 dropped 50 points, or 0.9%, and NASDAQ Composite slumped 325 points, or 1.8%.
Tech stocks sharply lower
The major Wall Street indices traded lower Wednesday, retreating from record levels with the tech sector leading the losses following a report from Bloomberg that the Biden administration is considering clamping down on companies exporting their critical chipmaking equipment to China.
Additionally, Republican presidential candidate Donald Trump raised geopolitical tensions by stating that Taiwan should pay the U.S. for supplying defense equipment as it does not give the country anything, causing Taiwan Semiconductor Manufacturing (NYSE:TSM), Taiwan’s biggest stock and the largest contract chipmaker in the world, to fall heavily premarket.
Trump made the comments in an interview with Bloomberg Businessweek that was published late Tuesday.
Dutch lithography equipment maker ASML (NASDAQ:ASML) stock also slumped in European trading despite a strong second quarter, with around half of its sales from China, highlighting the hefty downside in the event of tighter restrictions.
Hype over AI was a key driver of Wall Street’s rally over the past year, with technology stocks such as NVIDIA (NASDAQ:NVDA) leading a major spike in valuation. Loss of confidence in these stocks could result in a substantial revision in stock valuations.
Earnings season continues
The earnings season continued Wednesday.
Johnson & Johnson (NYSE:JNJ) stock rose 2.5% after the the healthcare giant reported a robust second quarter, with both earnings and revenue surpassing Wall Street estimates, driven by strong sales of its drugs.
Spirit Airlines (NYSE:SAVE) stock slumped over 8% after the carrier lowered its second-quarter revenue outlook, citing lower-than-expected non-ticket revenue.
JB Hunt (NASDAQ:JBHT) stock fell 5% after the transportation company reported a 24% drop in second-quarter profit as well as a 7% decrease in total operating revenue.
Five Below (NASDAQ:FIVE) stock slumped 15% after the discount retailer said that its CEO Joel Anderson had stepped down and preannounced second-quarter guidance that fell short of estimates.
Crude gains after US inventories draw
Crude prices rose Wednesday, as signs of tighter U.S. supplies helped soothe some fears over weakening demand in the rest of the globe, and China in particular.
By 09:55 ET, the U.S. crude futures (WTI) climbed 1.5% to $80.87 a barrel, while the Brent contract fell 1.2% to $84.69 a barrel.
{{8849|U.S. crcrude oil inventories fell by 4.4 million barrels last week, according to data from the American Petroleum Institute, considerably more than expected, pointing to a tight market in the world's largest oil producer and consumer.
The U.S. Energy Information Administration will release its official storage report later in the session.
Crude markets suffered a sharp tumble over the past week as weak economic data from top oil importer China ramped up concerns over slowing demand.
(Ambar Warrick contributed to this article.)