Chip stocks face a crisis of confidence, but the outlook is less bleak than it seems
Investors doubt that demand for chips will be sustained, while large technology companies maintain high spending and tension with Iran remains in the news.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MARKETWATCH · 2 MIN
Chip stocks are going through a moment of distrust. According to MarketWatch, the sector's decline reflects investors' concern that demand may not be sustained in the medium term.
However, the same vehicle records the reading of an analyst, for whom the situation is less bleak than it seems. One of the points mentioned is that large technology companies continue to spend high, which supports the thesis that demand for components continues to be strong.
On the same day, international news gained a new chapter. Trump, President of the USA, said on Monday (2), in an interview with the podcast Pod Force One, that he may take new military actions against Iran.
According to him, military operations are not completed and the US has hit Iranian territory hard. At the same time, Trump kept open the possibility of an agreement with Tehran and stated that the Iranian government wants to continue negotiations.
The interview also dealt with oil, the American economy and the mid-term elections, topics that usually come on the radar of those who operate the stock market, interest rates and the dollar.
What is at stake is the combination of two factors. On the one hand, there is doubt about whether the demand for semiconductors will be sustained. On the other, uncertainty about the outcome of the conflict and its effects on oil and the American economy. Trump's message, which talks about new offensives and negotiations at the same time, leaves investors unclear about which scenario will prevail.
What changes for the investor
For those who operate Nasdaq, the dollar and interest rates, it is worth separating two risks. The first is sectoral: if the concern about the demand for chips is confirmed, the segment may remain under pressure, and the maintenance of spending by large technology companies is the counterpoint highlighted by the analyst. The second is macroeconomic: the direction of oil and the American economy can influence interest rates and exchange rates, and a possible escalation or an agreement with Iran changes the weight of these factors. With the data collected, there is no basis for predicting prices, and the investor must monitor upcoming demand signals and diplomatic developments.
Automatically translated from Portuguese.
