ASML experienced a significant decline in its stock value during Wednesday’s trading session, with the share price dropping by 7% and reaching a decrease of up to 8.6% earlier in the day. Similarly, the S&P 500 experienced a 2.2% decline, while the Nasdaq Composite fell by 3.1%.
Before the market opened, ASML shared its first-quarter financial results, which surpassed market expectations. However, the report coincided with new restrictions on chip exports to China, increased tariffs on Chinese goods, and indications from the Federal Reserve that interest rate reductions would not be imminent.
ASML’s stock declined despite reporting earnings of 6 euros per share and sales totaling 7.74 billion euros. Earnings per share exceeded market expectations by 0.20 euros, although revenue was approximately 40 million euros below Wall Street’s estimates. Nevertheless, ASML’s sales were up 46% year over year, and the company reaffirmed its full-year guidance, projecting sales between 30 billion euros and 35 billion euros and a gross margin between 51% and 53%. Overall, ASML’s Q1 results and future outlook appeared robust, but economic and geopolitical factors contributed to a sell-off of the stock.
The semiconductor sector faced additional challenges following the Trump administration’s announcement of increased tariffs on Chinese goods, rising from 145% to 245%. Additionally, it was revealed that export restrictions on processors from Nvidia and AMD had been expanded.
Investor sentiment was further impacted by comments from Federal Reserve Chairman Jerome Powell, who indicated that the central bank is unlikely to reduce interest rates soon. This announcement dampened hopes for a rate cut, as the Federal Reserve awaits a clearer picture of the tariffs’ effects on inflation and economic growth.
