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Dow Jones Industrial Average futures fell by 32 points, or 0.06%. S&P 500 futures and Nasdaq-100 futures dipped 0.03% and 0.06%, respectively.
Bank of America shares dipped more than 2% in extended trading after the firm was hit with more than $1.2 billion in federal penalties, with regulators saying the bank failed to report more than $5 billion in “suspicious” transactions.
Wall Street is coming off a second straight losing session for the S&P 500 and Nasdaq Composite, which dipped 0.02% and 0.15%, respectively. The Dow Industrials also dipped 0.35%.
Those moves come after a drift downward in chip stocks weighed on the major averages, with the VanEck Semiconductor ETF (SMH) falling for a sixth straight session over growing fears of an AI spending bubble and rising anxieties around competition out of China.
A swath of big banks posted strong quarterly results, but shares ended the day lower, with Goldman Sachs and Citigroup falling. The market’s reaction suggested businesses have a higher bar to clear during the third-quarter earnings season — especially in tech where semiconductors are expected to be the largest contributor to year-over-year earnings growth.
S&P 500 companies are expected to post a blended earnings growth rate of roughly 30%, while semiconductors and semiconductor equipment are set to post growth of 130%, according to FactSet data.
“It’s a distinction between price and, kind of, business fundamentals. The business fundamentals are very strong. It’s very hard to argue with the demand side of the story for chips,” Marta Norton, chief investment strategist at Empower, told CNBC’s “Closing Bell: Overtime.” “But how much of that is already in the price?”
“I don’t know if we necessarily question how good those business fundamentals are as much as we question how much valuation is left in the space,” she added.
Investors are awaiting the September reading of the consumer price index Wednesday morning. Economists polled by Dow Jones anticipate inflation to have risen by 3.6% on a year-over-year basis, up from 3.4% in the prior reading.
The results arrive as oil prices remain elevated and consumers pay more for gasoline, which is averaging at $4.34 a gallon, compared to $3.08 per gallon a year earlier, according to AAA. Last week President Donald Trump announced he would temporarily ease restrictions on Russian diesel fuel exports, but analysts don’t believe the deal will do much to lower fuel prices for truckers and farmers.
Earnings season continues, with more big bank results from Bank of America and Morgan Stanley out Wednesday morning. Dutch semiconductor company ASML also reports.
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