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U.S. stock indexes took a sharp dive on Tuesday, with major losses across the board. The Dow Jones Industrial Average dropped 1.5%, the S&P 500 fell 2.1%, and the Nasdaq Composite suffered the largest blow, plunging 3.3%. These marked the steepest declines since August 5.
Premarket Movers:
| Company | Ticker | Stock Movement | Reason |
|---|---|---|---|
| Nvidia | NASDAQ:NVDA | Fell 2.1% | Subpoena by US Department of Justice |
| Dollar Tree | NASDAQ:DLTR | Fell 12% | Q2 earnings fell short and full-year outlook cut |
| Zscaler | NASDAQ:ZS | Fell 15% | Fiscal 2025 outlook fell short despite strong Q4 results |
| Asana | NYSE:ASAN | Fell 14% | Challenging quarter and CFO change |
| Clover Health Investments Corp | NASDAQ:CLOV | Gained 12% | Counterpart Unit secured contract from Iowa Clinic |
| Gitlab | NASDAQ:GTLB | Increased 15% | Raised full-year outlook due to AI and security integration |
| United States Steel | NYSE:X | Rose 0.5% | Rebounded after 6% drop, mill closure and HQ move possible if buyout collapses |
The DoJ's probe into Nvidia
The DoJ's probe into Nvidia (NASDAQ: NVDA) stems from concerns that the company may be making it difficult for customers to switch suppliers, allegedly penalizing those who don’t exclusively use its AI chips. Nvidia, however, denied these claims, stating that its customers can choose the best solutions for their needs.
The investigation follows complaints and comes at a time when Nvidia’s stock has already faced significant volatility. On Tuesday alone, the company shed over 9%, erasing around $279 billion in market value. Other chip giants like AMD (NYSE:AMD), Intel (NASDAQ:INTC), and Broadcom (NASDAQ: AVGO) also experienced heavy losses, as the chip sector reeled from the combined effects of the Nvidia news and broader market fears.
Qualcomm Pushes Into AI PCs
Amid the turbulence in the chip sector, Qualcomm (NASDAQ: QCOM) made headlines with the launch of its Snapdragon X Plus 8-core processor. The new chip is aimed at the AI-powered PC market, targeting devices priced as low as $700. This move pits Qualcomm against established industry players like Intel and AMD as it looks to broaden its semiconductor offerings.
Qualcomm has partnered with Microsoft (NASDAQ:MSFT), which is already using the Snapdragon chips in its Copilot+ PCs. The tech giant’s push into affordable AI PCs could potentially disrupt the market, adding another layer of competition to the already crowded field of chipmakers.
Dollar Tree Cuts Forecast Amid Rising Costs
Dollar Tree (NASDAQ: DLTR) slashed its full-year financial outlook, citing rising costs and weaker consumer spending. The discount retailer now expects net sales between $30.6 billion and $30.9 billion, down from previous estimates of $31 billion to $32 billion. Adjusted earnings per share are forecasted at $5.20 to $5.60, down from $6.50 to $7.
CFO Jeff Davis attributed the reduced outlook to higher costs from liability claims and weaker sales as inflation-strapped consumers cut back on spending. Rival Dollar General (NYSE:DG) also cut its forecast, reflecting challenges across the discount retail industry.
Dollar Tree’s stock has dropped nearly 43% in 2023, closing at a 52-week low of $81.65 on Tuesday. Walmart and online retailers like Temu continue to lure budget-conscious shoppers away from dollar stores.
