The weight of high AI growth expectations and valuations appears to be catching up to the Semiconductor sector. Last night Marvell Technologies beat the street by a penny on both EPS and guidance. That news, however, clearly was not good enough for many investors as Marvell shares are down 18.6% premarket and dragging other chipmakers downward as well. Broadcom, who reports after the close today, is down 4.8%, and sector darling Nvidia is down 3.2%.
The semiconductor retreat appears to be part of a broader market selloff. US index futures are down 1.0% to 1.6%. European trading is mixed with the Dax up 0.2% and the FTSE down 1.0%. The European Central Bank cut its benchmark lending rate by 0.25% to 2.65% as had been widely expected.
Growing uncertainty around the US and global economies appear to be weighting on markets. Yesterday, the Trump Administration gave a one-month reprieve on tariffs to automakers but otherwise the risk this trade war could worsen continues to increase.
US Challenger layoffs for February came in at 172.0K, up from 49.8K in January. This sharp increase in layoffs to its highest level since the summer of 2020 has been getting blamed on government spending cuts and adds to concern about the US job market following yesterday’s disappointing ADP payrolls. Tomorrow brings US Nonfarm Payrolls (street 160K) and Canada employment (street 20K).
Commodity trading is mixed today with Crude Oil up 0.4% and Copper down 0.3%. Currency trading is relatively quiet today with the Euro and the Canadian Dollar both up about 0.2%. Gold is down 0.5%.