Nasdaq hits record for second straight day, led by memory chips; bank stocks drag Dow

Tuesday, September 22 — U.S. major stock indexes ended mixed, with the Nasdaq Composite posting a second consecutive record close, driven by strength in semiconductor and storage chip stocks, while a decline in banking shares weighed on the Dow.

Market Close

• Dow Jones Industrial Average: Fell 185.14 points, or 0.36%, to 51,863.69
• Nasdaq Composite: Rose 122.19 points, or 0.45%, to 27,244.28
• S&P 500: Nearly flat, down 0.06 points to 7,764.64

Notable Stock Movements

Large-Cap Tech (Mixed)

• Tesla: +0.96%
• Nvidia: +0.66%
• Apple: +0.23%
• Meta: -0.63%
• Microsoft: -0.72%
• Alphabet (Google): -0.99%
• Amazon: -1.34%

Semiconductor & Storage Stocks (Strong)

The Philadelphia Semiconductor Index rose 2.06%. Storage and hard drive stocks led gains:

• SanDisk: +6.82%
• Micron Technology: +5.00%
• Seagate Technology: +4.85%
• Western Digital: +3.67%

Rosenblatt Securities initiated coverage on SanDisk with a "Buy" rating and a price target of $2,400, boosting expectations for AI infrastructure-driven storage demand.

Other chip stocks mostly rose:

• Marvell Technology: +1.93%
• Intel: +1.71%
• TSMC (ADR): +1.54%
• AMD: +1.34%
• Broadcom: +0.52%

Optical communication stocks were mixed:

• Lumentum: -0.92%
• Coherent: -3.46%

Financial Sector (Major Drag)

The S&P 500 Financials sector fell 1.68%, with the bank index down approximately 3%:

• JPMorgan Chase: -3.42%
• Bank of America: -3.04%
• Citigroup: -1.91%
• Goldman Sachs: -1.03%

The yield spread between the 2-year and 10-year U.S. Treasury notes narrowed to about 18 basis points, the smallest since March 2025, as short-end yields fell more than long-end yields. The flattening yield curve raised concerns over bank net interest margins.

Energy Stocks (Weaker)

• ConocoPhillips: -1.77%
• Chevron: -0.62%
• Exxon Mobil: +0.26% (bucking the trend)

Dow Components

• Walmart: +2.49%
• UnitedHealth: -1.22%

Chinese ADRs (Mostly Higher)

The Nasdaq Golden Dragon China Index rose 18.67 points, or 0.32%, to 5,846.90:

• Pinduoduo: +1.33%
• NetEase: +1.10%
• Bilibili: +0.72%
• Trip.com: +0.49%
• Alibaba: +0.48%
• JD.com: +0.37%
• Baidu: +0.24%

New energy vehicle makers:

• NIO: +1.36%
• Li Auto: +1.22%
• XPeng: +0.10%

Market Overview

Sector rotation continued on Tuesday. A notable drop in international oil prices during the session helped ease short-end Treasury yields, reducing pressure on growth stock valuations from high energy costs and potential further rate hikes. Capital continued flowing into AI hardware and storage chip sectors, pushing the Nasdaq and Nasdaq 100 to new records. Meanwhile, declines in banking and energy stocks weighed on the Dow.

• Nasdaq 100: +0.82% to 30,732.40 (record close)
• Russell 2000: +0.51% to 2,889.92
• CBOE Volatility Index (VIX): -4.44% to 14.21

Of the S&P 500's 11 major sectors, 5 rose and 6 fell. Materials led gains, while Financials and Communication Services lagged.

Fed Commentary

Richmond Fed President Thomas Barkin, speaking in Baltimore, said the U.S. economy "if anything, is strengthening." He noted resilient consumer spending, economic momentum extending beyond AI and data centers, strong defense sector demand, improving manufacturing sentiment, and a healthy banking pipeline.

Barkin stated that inflation risks currently outweigh full employment risks, which was the rationale behind the Fed's recent rate hike. He noted that shocks such as energy and tariffs, once considered temporary, are not fading quickly, and price pressures are becoming more persistent. A significant portion of PCE components still show year-over-year growth above 3%. On whether further rate hikes are needed, Barkin said the Fed will "wait and see."

Rate Expectations

Interest rate futures markets indicate traders see approximately a 53% probability of at least a 25-basis-point rate hike at the Fed's October meeting. Market focus is shifting from last week's rate decision to energy prices, upcoming inflation data, and Fed officials' stance on further tightening.

Bond Market

According to the U.S. Treasury's daily constant maturity yield curve:

• 2-year yield: 4.71% (down 5 bps from prior session)
• 10-year yield: 4.96% (unchanged)
• 30-year yield: 5.29% (unchanged)

Short-end yields fell while long-end yields held steady, further flattening the yield curve.

Geopolitical Developments

According to Xinhua News Agency, U.S. President Donald Trump confirmed on Tuesday that U.S. and Iranian officials held a three-hour meeting in New York and plan to meet again soon. Speaking to reporters during a meeting with Ukrainian President Volodymyr Zelenskyy on the sidelines of the UN General Assembly, Trump described the U.S.-Iran talks as "very smooth" and "productive," without disclosing details or the timing of the next meeting.

Economic Data

The Richmond Fed's September Manufacturing Survey showed:

• Composite Index: Fell from 4 in August to -2 (back into contraction territory)
• Shipments Index: Dropped from 11 to -5
• New Orders Index: Declined from 3 to -6
• Employment Index: Rose from -2 to 7

Manufacturers' assessment of current business conditions weakened, with the local business conditions index falling from 4 to -6. The six-month outlook for business conditions declined from 16 to 10, and the employment expectations index fell from 20 to 8. Input price growth accelerated significantly, while selling prices rose only modestly, indicating rising cost pressures.

Commodities

Oil

International oil prices fell for a fifth consecutive session, marking the longest losing streak in over a year:

• WTI crude: $94.59/barrel (-1.24%)
• Brent crude: $99.25/barrel (-1.09%), closing below $100 for the first time since September 8

Precious Metals

• COMEX gold: Approximately $4,400.80/oz
• COMEX silver: Approximately $67.83/oz