US semiconductor stocks plunge! Manufacturing index hits a 10-year low

According to Jiwei.com, Wall Street had a bad start to the fourth quarter on October 1st. The U.S. Manufacturing Purchasing Managers' Index for September released by the Institute for Supply Management (ISM) fell to 47.8%, a ten-year low. The four major U.S. stock indexes plummeted collectively, with the Dow Jones and S&P indices falling the most in five weeks.

Performance of the four major U.S. stock indexes:

▪ The Dow Jones Industrial Average fell 343.79 points, or 1.28%, to close at 26,573.04.

▪ The Nasdaq Composite Index fell 90.65 points, or 1.13%, to close at 7,908.69.

▪ The S&P 500 index fell 36.49 points, or 1.23%, to close at 2,940.25.

▪ The Philadelphia Semiconductor Index fell 14.55 points, or 0.93%, to close at 1544.20.

Semiconductor stocks were led by Xilinx, which was negative news for the chipmaker as Chinese companies such as Huawei increased production of smartphones and 5G infrastructure components in China due to the ongoing US-China trade war.

KeyBanc downgraded Xilinx (XLNX-US) stock rating to "Sector-Weight" and lowered its target price to $130 per share. Its stock price fell 4.03% on Tuesday.

ON Semiconductor (ON-US) fell 2.34%; Skyworks (SWKS-US) fell 2.32%; Intel (INTC-US) fell 1.49%; Qualcomm (QCOM US) fell 1.06%; AMD (AMD-US) fell 0.79%; Nvidia (NVDA-US) fell 0.040%; AMD (AMD-US) fell 0.79%.

The U.S. Institute for Supply Management (ISM) released its September manufacturing purchasing managers index on Tuesday, which fell to 47.8%, the lowest since June 2009 and fell below the prosperity watershed of 50 for two consecutive months. Due to insufficient demand, the employment index fell to the lowest level since January 2016.

 ISM Manufacturing PMI (Image: Calculated Risk)

Influenced by this news, the Dow Jones Index immediately turned from red to black.