The three major U.S. stock indexes closed lower. The decline was seen as fallout from the U.S. government's review of sweeping restrictions on exports of products based on U.S. software, aimed at China.
On the 22nd (local time) at the New York Stock Exchange, the Dow Jones Industrial Average finished at 46,590.41, down 334.33 points, or 0.71%, from the previous session. The Standard & Poor's (S&P) 500 fell 35.95 points, or 1.07%, to 6,699.40, and the tech-heavy Nasdaq closed at 22,740.40, down 213.27 points, or 0.93%.
That day, it emerged that the U.S. government is reviewing export restrictions on products containing U.S.-made software, ranging from laptops to jet engines.
Scott Bessent, the U.S. Treasury secretary, said, "Whether it's software, engines, or anything else, if export controls are implemented, it is highly likely they will be carried out in coordination with the Group of Seven (G7)." However, it is still under review and could change depending on the direction of China's rare earth export measures.
As China's rare earth export controls and the U.S. restrictions on software exports to China continue, investor sentiment is deteriorating. In addition, weak earnings by major corporations are keeping investors on the sidelines.
Netflix announced after the close the previous day that its adjusted third-quarter earnings per share (EPS) were $5.87 and revenue was $11.51 billion. As EPS missed market expectations, the share price plunged 10%.
Tesla said third-quarter revenue was $28.1 billion and EPS was $0.50. While revenue topped expectations, EPS likewise fell short, and the stock closed down 0.82%.
By sector, energy rose more than 1%. Industrials and consumer discretionary fell more than 1%.
The Philadelphia Semiconductor Index, composed of artificial intelligence (AI) and semiconductor-related stocks, slumped 2.36%, and all of the 30 components were shown to have declined except Qualcomm.
Thierry Wizman, a strategist at Macquarie Group, said, "There are reports that U.S. corporations' third-quarter results were much better than expected," but noted, "Some concerns about management guidance may still remain." He added, "Some key reports released last night had a pessimistic tone."