Nasdaq crashes as microchip stocks tumble. Picture Getty
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The ASX200 index is expected to retreat when the market opens on Thursday, in line with losses on Wall Street. At 8am AEST, the ASX200 futures contract was pointing down by 0.6%.
Overnight, the S&P 500 tumbled by 1.39%, the blue chips Dow Jones index rose a further 0.59% to yet a new high, and the tech-heavy Nasdaq crashed by 2.77%.
Tech stocks took a hit following news of potential new export regulations for semiconductor chips in the US and the prospect of further strain in US-China economic relations.
The Biden administration had informed allies that it was contemplating stringent restrictions if companies such as Tokyo Electron and ASML continue to provide China with access to advanced semiconductor technology (see more below).
The Philadelphia Semiconductor Sector Index fell by almost 7%, with Nvidia being the biggest loser on the Nasdaq, down 6.62%.
Other chipmakers followed suit. Dutch chipmaker ASML was down by 12.74%, Arm Holdings by 9.55%, Qualcomm by 8.61%, and Broadcom by 7.91%. Yesterday, Tokyo Electron sank by 7.46% in Tokyo.
“This news on the chip front is the kind of UFO (UnForeseen Occurrence) that could indeed create the kind of selling that could be the catalyst for a tradable correction in the stock market,” said Matt Maley at Miller Tabak + Co.
In other stock news, Tesla dropped 3% despite Cathie Wood from Ark Investment stating that the company’s creation of a self-driving taxi service will lead to a 10x increase in its share price. This prediction continues her long-standing optimism about a business Tesla has yet to establish.
Amazon slipped by 2.64% after its marketing portal for merchants went down, disrupting one of the online retailer’s major sales events of the year, Prime Day.
The Biden administration has been facing resistance to its crackdown on chip technology exports to China.
In response, it has informed allies that it might implement the strictest trade restrictions if companies like Tokyo Electron and ASML keep supplying advanced semiconductor technology to China.
The US is considering using the foreign direct product rule (FDPR), which basically bans foreign-made products that contain even a small amount of American technology.
This measure, viewed by allies as extreme, would target companies like Japan’s Tokyo Electron and the Netherlands’ ASML, which produce essential chipmaking equipment.
The US has been discussing this potential move with officials in Tokyo and The Hague, making it clear that if these countries do not tighten their regulations on China, the US might proceed with the FDPR.
The administration is in a tricky spot.
US companies feel that the export restrictions to China are unfairly hurting them and are pushing for changes. Meanwhile, allies are hesitant to adjust their policies with the US presidential election just a few months away.
Gold price fell by 0.4% to US$2,458.97 an ounce.
Oil prices rallied by 2%, with Brent crude now trading at US$85.17 a barrel.
The benchmark 10-year US Treasury yield traded flat at 4.16%.
The Aussie dollar also traded flat at US67.31 cents.
The iron ore price slipped by 2% to US$105.05 a tonne.
Bitcoin meanwhile traded flattish in the last 24 hours to US$64,3781 while Ethereum eased by 0.6% to US$3,402.
Neurotech (ASX:NTI)
Neurotech has announced promising results from its Phase II/III clinical trial for autism, showing significant improvements in anxiety and depression after 8 weeks. The trial measured changes in the Anxiety, Depression, and Mood Scale (ADAMS) for children with autism, revealing a statistically significant and meaningful improvement in scores from day 0 to week 8. Considering that around 40-50% of children with autism experience significant anxiety and 10-20% face depression, these findings are particularly encouraging. Notably, children treated with NTI164 showed substantial improvements even when already taking anxiety or depression medications, with 62% of participants on such treatments at the start.
Dreadnought Resources (ASX:DRE)
Dreadnought has identified four strong off-hole conductors at Tarraji-Yampi, where six diamond holes totalling 1,524.8 meters were drilled to test Cu-Au VMS targets around the Orion deposit. Down hole EM (DHEM) surveys revealed significant mineralization, and assay results are expected in August. Notably, a 50,000S conductor was found about 100 meters down dip from a previous gossan intercept, suggesting a structural offset of Orion. This, along with other identified conductors, will be priority targets for follow-up drilling. Additionally, niobium-focused drilling at Mangaroon will begin this week.
Metal Hawk (ASX: MHK)
MHK announced promising assay results from drilling at its Berehaven project, located 20km southeast of Kalgoorlie. After discovering high-grade nickel sulphide and gold at the Commodore prospect in late 2021, the company found a new gold zone, Commodore North, in May 2023. This discovery came from a single reverse circulation (RC) hole, BVNC065, which revealed multiple gold mineralization zones. In June, Metal Hawk followed up with six more RC holes totaling 813 meters, confirming Commodore North as a significant gold prospect. Notable results include 6m at 1.58g/t Au from 40m (BVNC066) and 2m at 2.51g/t Au from 105m (BVNC067).
Miramar Resources (ASX:M2R)
Miramar announced impressive high-grade copper, lead, and silver results from its new “Chain Pool” Project in WA’s Gascoyne region. During an initial field trip, samples from the “Joy Helen” prospect showed high concentrations, including up to 5.49% copper, 42.0% lead, and 73.48g/t silver. Executive Chairman Allan Kelly says the Gascoyne region has potential for various commodities but has been under-explored. He expressed enthusiasm for further uncovering of its potential.
Titomic (ASX:TTT)
The Repkon-Titomic joint venture has begun with a $2.3 million order for a TKF 1000 cold spray system. Building on recent collaborations with defense companies like Triton Systems, Boeing, and Airbus, this purchase will support the production of high-performance barrels by combining Titomic’s TKF technology with Repkon’s flow-forming techniques. Titomic, which owns 49% of the joint venture, aims to create the world’s first hybrid cold spray manufacturing facility in Turkey. This facility will speed up production, use a wider range of materials, produce lighter components, and enhance performance. The TKF 1000 system, the first to be installed, will replicate proven processes from Titomic’s Melbourne Bureau and help promote the technology to new customers, opening up more opportunities within Repkon’s portfolio.
At Stockhead we tell it like it is. While Miramar Resources and Neurotech are Stockhead advertisers, they did not sponsor this article.
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