US STOCKS-Futures slip on escalating Ukraine war, dip in chip stocks

Credit: REUTERS/Brendan McDermid

By Ankika Biswas

Oct 10 (Reuters) - U.S. stock index futures slipped on Monday, as an intensifying war in Ukraine and U.S. curbs on chip technology exports to China hit investors' appetite for risk assets ahead of the upcoming earnings season.

Major U.S. banks are set to kick off the earnings season this week, in what is expected to be a roller-coaster quarter for companies, which have been dealing with inflationary pressures, rising interest rates and geopolitical uncertainties.

Russia struck Ukrainian cities during rush hour on Monday morning, killing civilians and destroying infrastructure after President Vladimir Putin declared an explosion on the bridge to Crimea as a terrorist attack.

The Biden administration's move to hobble China's chip industry with sweeping new export rules hit shares of Intel Corp INTC.O, Nvidia Corp NVDA.O, Qualcomm Inc QCOM.O, Micron Technology Inc MU.O and Advanced Micro Devices AMD.O, all of which fell between 0.2% and 1.2%.

As analysts increasingly price in a downturn next year, earnings for S&P 500 companies for the third quarter have now been estimated to rise 4.1%, down from an increase of 11.1% at the beginning of July, according to Refinitiv data.

At 6:47 a.m. ET, Dow e-minis 1YMcv1 were down 54 points, or 0.18%, S&P 500 e-minis EScv1 were down 11.25 points, or 0.31%, and Nasdaq 100 e-minis NQcv1 were down 50 points, or 0.45%.

The U.S. bond market was shut on Monday on account of Columbus Day, which could lead to thin trading volumes.

Wall Street fell sharply on Friday following a solid jobs report for September that increased the likelihood of the U.S. Federal Reserve sticking to its aggressive interest rate hiking campaign and likely pushing the U.S. economy into a recession.

Money markets are pricing in an 89% chance of another 75 basis-point hike at the Fed's November meeting. FEDWATCH

As economic data continues to point to price pressures, investors will keep a close watch on comments from Fed's Chicago President Charles Evans and Vice Chair Lael Brainard.

With yields on the 10-year Treasury note US10YT=RR rising to a near two-week high, rate-sensitive technology and other growth names such as Alphabet Inc GOOGL.O, Apple Inc AAPL.O and Meta Platforms Inc META.O were in the red.

Tesla Inc TSLA.O dipped in premarket trading after RBC Capital Markets expressed concerns on overall demand, while cutting its price target and flagging potential risk to fourth-quarter deliveries in the United States.

(Reporting by Ankika Biswas; Editing by Anil D'Silva)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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