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Tech shares sell off; pound holds ground as Brexit uncertainty continues


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Tech shares sell off; pound holds ground as Brexit uncertainty continues

U.S. stocks were mixed; Texas Instruments' results led to a sell-off in tech shares.

➤ U.S. Treasurys rose; the dollar was flat.

➤ The sterling was nearly flat amid reports that France may reject a Brexit extension.

➤ U.K. lawmakers back a Brexit deal but not a timetable for passing a bill.

U.S. stocks were mixed as investors continued to track corporate results and global chip makers sold off after disappointing results from Texas Instruments Inc. The pound was little changed amid a looming general election in the face of a potential Brexit delay.

The S&P 500 was little changed around 10:15 a.m. ET, and Nasdaq 100 slipped 0.2% around 10:15 a.m. ET.

Texas Instruments' shares declined 6.6%, having slumped nearly 10% in pre-market trading after the chipmaker's net income declined, despite a boost from items not part of its original guidance. Other semiconductor makers Intel Corp. and Analog Devices Inc. were trading lower, as Texas Instruments Chairman, President and CEO Rich Templeton said "most markets weakened further" in the third quarter.

Shares of Switzerland-based STMicroelectronics NV, Japan's Renesas Electronics Corp. and South Korea's SK hynix Inc. also declined.

The S&P 500 fell below 3,000 to end the Oct. 22 session down 0.4%, while the Nasdaq 100 index lost 0.8%.

Corporate earnings continued, with Boeing Co. reporting third-quarter revenue of $20.0 billion and GAAP EPS of $2.05, reflecting lower 737 deliveries partially offset by higher defense and services volume. Boeing's share price rose 3.4%.

Microsoft Corp. is among companies scheduled to report later today.

In Europe, the FTSE 100 rose 0.5% and the German DAX gained 0.2%, while France's CAC 40 fell 0.3%.

Asian bourses were also mixed, as Japan's Nikkei 225 gained 0.3%, while the Shanghai SE Composite lost 0.4% and Hong Kong's Hang Seng declined 0.8%. China is reportedly planning to replace embattled Hong Kong leader Carrie Lam by March 2020 with an interim chief executive who will serve out the rest of her term ending 2022. Meanwhile, the controversial extradition bill was formally withdrawn Oct. 23.

In currencies, the dollar index was nearly flat.

Over in the U.K., Brexit uncertainty continued, with Prime Minister Boris Johnson reportedly saying that France's Emmanuel Macron could reject another Brexit extension. That could mean a disorderly Brexit on Oct. 31.

The House of Commons backed Prime Minister Boris Johnson's Withdrawal Agreement Bill — the first time that Parliament has voted in favor of a Brexit deal since the June 2016 referendum — but rejected the government's proposed timetable, which would have allowed the U.K. to leave the EU on Oct. 31 with a deal. As a result, Johnson decided to "pause" the legislation while awaiting the EU's decision on another Brexit delay.

European Council President Donald Tusk said he will recommend to EU leaders to accept the U.K.'s request for a delay. A government official reportedly said Johnson would push for an early election if the EU grants a three-month extension.

A general election is looming as it is impossible for Johnson to keep his "do or die" pledge of leaving the EU by the end of the month and the Conservatives are performing well in election polls, said Morten Lund, analyst at Nordea Markets. He expects a snap poll in December.

The British pound was little changed at $1.2879.

More uncertainty is being priced back into sterling, though the downside for the currency remains "quite limited," according to an ING research note.

"The pound may drop some of the recent high volatility and get stuck in a 'wait-and see,' relatively tighter band, possibly hovering around the 1.28-1.29 area vs the USD," the note added.

The euro was little changed ahead of the European Central Bank's policy decision tomorrow. The Japanese yen was also nearly flat.

Bonds rose as the yield on 10-year Treasurys shed 3 basis points to 1.738% and that on German Bunds due in a decade was down 3 basis points to negative 0.396%.

Among commodities, Brent crude oil gained 0.2% to $59.80 per barrel on the ICE Futures Exchange. Gold advanced 0.7%.

More from S&P Global Market Intelligence:

Automakers' finance arms expand into mobility services to grow revenue

First BanCorp. deploys capital stockpile in $1.1B deal

Only 2 banks under $10B in assets miss analyst estimates as Q3 earnings begin

Most US banks with more than $100B in assets outperform Q3 analyst expectations

The day ahead:

8:30 p.m. ET — Japan purchasing managers index