CNBC Daily Open: Rising geopolitical risk

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CNBC Daily Open: Rising geopolitical risk

Traders work on the floor of the New York Stock Exchange during afternoon trading on April 09, 2024 in New York City. 

Michael M. Santiago | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Nasdaq’s worst sessionThe

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, plunging nearly 3%, as semiconductors came under pressure amid reports of tougher trade restrictions. The

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also retreated as the rotation out of technology stocks continued.

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tumbled 5.7%, while Big Tech peers

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and

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dropped more than 1% and

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slid 2.5%. Bucking the trend, the

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closed above 41,000 for the first time. The small-cap focused

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slipped 1%, ending its five-day win streak. The yield on the 10-year

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was little changed, while

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rose 2.6%.

Chip tensions

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amid potentially tighter restrictions on U.S. exports to China and escalating geopolitical tensions. U.S.-listed shares of 

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 and 

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plunged 12% and 8%, respectively. The declines followed a

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that the Biden administration is

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on companies exporting technology to China.

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shares slumped more than 6%, while

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,

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,

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and

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slid about 10% each.

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slid almost 9%. The

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dropped more than 7%, its biggest daily loss since 2022.

Getting closerFederal Reserve Governor Christopher Waller suggested that 

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, barring major surprises in inflation and employment data. “I believe current data are consistent with achieving a soft landing… while I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted,” Waller said. His comments align with those of other policymakers, indicating a rate cut is unlikely at the upcoming Federal Open Market Committee meeting, but more probable in September.

******* soars

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‘

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more than 20%, driven by strong international travel demand. However, the carrier’s third-quarter earnings forecast fell short of expectations, now projecting $2.75 to $3.25 per share compared with the expected $3.44. Despite an industry-wide struggle with overcapacity pressuring airfares, ******* and

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have thrived by increasing international flights and premium offerings.

Eli Lilly slides

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‘s stock surged after 

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, sending shares of rivals 

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, 

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 and Zealand Pharma tumbling. The Swiss pharmaceutical giant announced promising early-stage data for its second obesity ***** candidate, intensifying competition in the weight loss market. Roche shares jumped 5.8%, while Novo Nordisk and Eli Lilly dropped 3.8%, and Zealand Pharma plunged 8.4%.

[PRO] Double-digit correctionSam Stovall from CFRA Research believes a market correction is likely despite a recent rotation from tech stocks to small caps. Small-cap stocks have rallied due to positive economic data, while mega-cap tech stocks like Nvidia have declined. This rotation may not be enough to prevent a

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Stovall argued.

The bottom line

A Bank of America survey of global fund managers — conducted July 5-11 before an attempt on Donald Trump’s life — revealed that “

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” had overtaken “higher inflation” as the primary risk for investment.

The survey was conducted against a backdrop of multiple global tensions: France’s hung parliament, pressure on President Joe Biden to step down as the Democratic presidential candidate, Russia’s ongoing war on Ukraine, *******’s war in Gaza and the fraught relationship between China and Taiwan.

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and his choice of VP, JD Vance, have further heightened geopolitical concerns. Taiwan “did take about 100% of our chip business. I think, Taiwan should pay us for defense,” Trump said. Casting doubt on U.S. commitments to Taipei was enough to send the

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and

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tumbling on Wednesday.

A Trump victory could be

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, CNBC’s Karen Gilchrist writes, as his “America-first” policy could trigger tariffs of “

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” on ******** imports and 10% on all U.S. imports. Trump’s 2018

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and resulted in the loss of 245,000 jobs.

“Donald is a dealmaker. The president is a dealmaker,

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, you know he wants to make a deal.” Howard Lutnik, CEO of Cantor Fitzgerald, told CNBC’s “Squawk on the Street.” “But he called out China the last time, I think there is a deal out there he’s thinking about and he’s working on. But he’s going to start tough and then he’s going to make a deal. He cares about business in America, I know he cares about business in America.”

Vance has strongly opposed aid for Ukraine. “

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” was the reaction of Timothy Ash, emerging markets strategist at BlueBay Asset Management, as CNBC’s Holly Ellyatt writes. Vance has also identified China as the “biggest threat” to the ******* States.

Adding to the tension, the Biden administration is considering more restrictions on companies

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. This news caused shares of ASML, Nvidia, and TSMC to fall sharply.

These converging factors have heightened market risk, triggering a nearly 3% slide in the Nasdaq as investors shift toward other sectors. Bank of America cautions that

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, while CFRA Research’s chief investment strategist, Sam Stovall, warns that even the

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— CNBC’s Jeff Cox, Pia Singh, Alex Harring, Leslie Josephs, Sarah Min, Samantha Subin, Arjun Kharpal and Rebecca Picciotto contributed to this report.

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#CNBC #Daily #Open #Rising #geopolitical #risk

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