Wall Street falls on rising US-China tensions, Caterpillar shares weigh

Aug 2 (Reuters) – Major Wall Street indexes fell on Tuesday on concerns over rising U.S.-China tensions ahead of U.S. House of Representatives Speaker Nancy Pelosi’s arrival in Taiwan, losses in the industrial Caterpillar adding to the decline.

Shares of chipmakers with heavy exposure to China fell, while Caterpillar (CAT.N) fell 3.6% as construction activity slowed in the world’s second-largest economy and operations halted in Russia adding to its supply chain problems. Read more

“Chip stocks are really exposed to Asia. Some of them do 70% of their sales, especially chip equipment companies, in that region, so it’s a big deal for them,” said Jack DeGan, chief investment officer at Harbor Advisory.

The latest geopolitical uncertainty comes at a time when financial markets are struggling to cope with the fallout from war in Ukraine, an energy crisis in Europe, runaway inflation and tighter financial conditions.

“Any type of geopolitical concern can cause traders who gained quite a bit in the past week to take a bit (of profit) off the table.”

The CBOE Volatility Index (.VIX), also known as the Wall Street Fear Gauge, hit 24.31 points, its highest level in nearly a week and the Philadelphia Semiconductor Index SE (.SOX) fell 1%.

As of 10:16 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 301.47 points, or 0.92%, at 32,496.93, the S&P 500 (.SPX) was down 25.27 points, or 0.61%, to 4,093.36, and the Nasdaq Composite (.IXIC) lost 56.02 points, or 0.45%, to 12,312.95.

Among individual stocks, DuPont de Nemours (DD.N) fell 1.4% after the industrial materials maker cut its full-year outlook, while shares of ratings firm S&P Global Inc ( SPGI.N) fell 2.6% on a pessimistic earnings forecast for 2022. Read more

Uber Technologies Inc (UBER.N) jumped 14.1% after the ride-hailing company reported positive quarterly cash flow for the first time and forecast upbeat operating profit for the third quarter. Read more

Pinterest Inc (PINS.N) jumped 13.3% as activist investor Elliott Investment Management became the biggest shareholder in the digital bulletin board company. Read more

Meanwhile, data showed U.S. job vacancies fell more than expected in June, suggesting labor demand was beginning to cool, which could ease pressure on the labor market. Federal Reserve for an aggressive increase in interest rates. Read more

The US central bank has raised rates by 2.25 percentage points this year and has pledged to be data-driven in its approach to future hikes.

Falling issues outnumbered advances by a ratio of 1.90 to 1 on the NYSE and by a ratio of 1.11 to 1 on the Nasdaq.

The S&P index recorded a new 52-week high and 30 new lows, while the Nasdaq recorded 21 new highs and 41 new lows.

Reporting by Aniruddha Ghosh and Devik Jain in Bengaluru; Editing by Anil D’Silva and Arun Koyyur

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