Nasdaq Futures Fall 1% on Risk of Trade Curbs – Europe Market Wrap

Global tech shares fell, with Nasdaq futures down more than 1%, on fears that the US might impose stricter restrictions on Chinese trade and semiconductor technology.

Nvidia, Intel, and Apple all retreated in trade before the US marketplaces opened. ASML fell 6%, with technology stocks also leading the decline in Europe. The Biden administration is considering imposing the most severe trade restrictions possible if businesses such as ASML continue to provide China with access to breakthrough semiconductor technology.

The stock market move indicates a minor retracement after a strong run of gains, with the S&P 500 closing at another all-time high on Tuesday. Optimism that the Fed will decrease interest rates, combined with weaker inflation data, has prompted investors to shift money away from mega-cap stocks and towards small-cap stocks. Over the last four sessions, the Russell 2000 outperformed the Nasdaq 100 by nearly 12 percentage points, a feat not seen since 2011.

In currencies, the Pound surpassed $1.30 as traders reduced their bets for an interest rate cut in August following stronger-than-expected inflation figures. The Yen climbed 1% versus the Dollar, eliminating the need for Japanese officials to intervene in the market again.