Dow and Nasdaq Slump as ASML Reports Weak Earnings

The Dow Jones and other major indexes posted losses on Tuesday afternoon as chipmakers struggled amid news of possible export restrictions.

In the afternoon, the Dow Jones Industrial Average fell 118 points, or 0.28%, to 42,939. The tech-heavy Nasdaq and S&P 500 lost 0.8% and 0.4%, respectively.

Shares of Dutch semiconductor equipment maker ASML (ASML) crashed after The company's disappointing booking numbers for the third quarter and a downward revision to 2025 guidance. During afternoon trading, ASML shares fell more than 16%, reflecting investor concerns about the company's prospects.

“While there continues to be strong developments and upside in AI, other market segments are taking longer to recover,” said CEO Christophe Fouquet said in the company's earnings report. “It now appears that the recovery is slower than previously expected.”

ASML is the only company in the world that makes the equipment needed for advanced chip manufacturing, almost half of it ASML's second quarter revenue came from sales to China. However, due to Export restrictions from the USA and the NetherlandsThe company now faces more difficult business prospects in China.

Nvidia shares fall as US eyes export restrictions on AI chips

Nvidia shares (NVDA) fell over 5% on Tuesday, a day later after closing at a record high. The chipmaker's shares lost less than 1% in premarket trading, but were down about 5% by midday.

The decline came after a report that the The US could limit sales of advanced artificial intelligence chips from US-based chip manufacturers to certain countries. Biden administration officials have talked in recent weeks about setting a cap on export licenses for advanced AI chips, including those from Nvidia and rival AMD (AMD), to Middle Eastern countries, citing national security concerns, Bloomberg reported.

Among the major semiconductor stocks is Advanced Micro Devices (AMD) fell 4.9%, Micron Technology (MU) fell 3.5% and Broadcom (AVGO) fell 3.5% on Tuesday.

–Britney Nguyen contributed to this article