Wall Street falls across the board on chip weakness; SK hynix ADR drops over 3%

All three major US stock indexes fell Tuesday as weakness in memory chip stocks spread from Asian markets, though losses narrowed after a Federal Reserve official signaled caution on further interest rate increases.

The Dow Jones Industrial Average closed down 180.45 points, or 0.35 percent, at 51,670.10.

The S&P 500 slipped 1.79 points, or 0.02 percent, to 7,805.45, while the NASDAQ Composite fell 41.52 points, or 0.15 percent, to 27,204.38.

Markets were closely watching third-quarter earnings from major US banks, which kicked off the earnings season.

Citigroup, Goldman Sachs and Wells Fargo all reported higher net profit than a year earlier, yet their share prices still fell.

Investor expectations had run ahead of the results, weighing on the stocks.

"Banks still reported solid earnings, but expectations were just too high," said Rebecca Walser, chief investment officer at Walser Wealth Management. "High expectations can be a risk factor for every company during earnings season."

The equities divisions of major banks are expected to outperform their fixed-income, foreign-exchange and commodities units, Bloomberg reported. The equity divisions of five large US banks generated more than $66 billion in sales in the first nine months of this year, an estimated $3 billion ahead of projections for their bond and other divisions.

Semiconductor stocks also came under pressure amid concerns about advances in Chinese chip technology.

CXMT announced Tuesday that it had achieved a new breakthrough in DRAM memory technology and planned to launch next-generation server products based on it before the end of this year.

Following Tuesday's decline, shares of Micron Technology fell 3.62 percent, SK hynix's American depositary receipt dropped 3.19 percent and Western Digital slid 1.61 percent.

The Philadelphia Semiconductor Index fell for a fifth consecutive trading session.

Losses were partially cushioned by remarks from New York Fed President John Williams in an interview with Bloomberg.

Williams said he believes one more interest rate increase this year would be appropriate, but added that he does not see the need for another hike in 2027.

His comments came ahead of key inflation data. Markets expect September consumer price index growth to accelerate, though core CPI — which strips out food and energy — is expected to show easing pressure.

Meanwhile, Federal Reserve Governor Christopher Waller said surging long-term US government bond yields are helping to curb demand in interest rate-sensitive sectors such as housing and automobiles. "This is performing some of the work of tighter monetary policy," he said.