The landscape of US equity indexes showcased mixed outcomes on Wednesday, primarily influenced by a decline in semiconductor stocks, which exerted downward pressure on both the Nasdaq Composite and the S&P 500 indexes. This situation has subsequently elevated the concern surrounding geopolitical risks into the spotlight. The United States is deliberating the introduction of a foreign direct product rule.
This regulatory framework would empower the US to impose stringent controls on foreign-manufactured products that contain even a minor fraction of American technology, particularly targeting semiconductor chips produced in China. This insight comes from a report by D.A. Davidson, highlighting the increasing scrutiny and potential restrictions in the tech supply chain. On the economic front, data released indicated that US industrial production saw an increase of 0.6% in June, surpassing consensus expectations of a mere 0.3% rise as estimated in a Bloomberg survey.
This follows an upwardly adjusted production increase of 0.9% in May. Additionally, housing starts for June registered a 3% uptick compared to the previous month, reaching an annual rate of 1.353 million, which was also above the anticipated figure of 1.30 million. This marks a recovery from a revised figure of 1.314 million in May. In the commodities sector, August West Texas Intermediate crude oil prices ascended by $2.11, settling at $82.87 per barrel.
Similarly, September Brent crude, recognized as the global benchmark, was recorded up by $1.31, reaching $85.04. This surge comes in the face of a significant decline in US commercial crude oil stocks, which fell by 4.9 million barrels during the week ending July 12, excluding inventory adjustments from the Strategic Petroleum Reserve. Amid these fluctuations, the performance of individual stocks was notable.
Aehr Test Systems ($AEHR) witnessed an impressive surge, with its shares spiking nearly 24%. This notable uptrend followed the announcement of orders valued over $12.7 million from a key customer specializing in silicon carbide test and burn-in processes. Conversely, Taiwan Semiconductor Manufacturing Co.
($TSM) experienced a 7.4% decline. This drop was exacerbated by comments from former President Donald Trump, who suggested that Taiwan should financially contribute to the US for its defense, raising concerns about geopolitical relations and economic dependencies. As market participants continue to digest these mixed signals from various sectors, the attention shifts to how these economic indicators and corporate performances will shape the trading landscape in the days ahead..