US stock markets declined as investors grew cautious ahead of key economic data and concerns over persistent supply issues in high-end memory chips, impacting tech giants and sector sentiment.
US equities finished lower as investors turned cautious ahead of the August 7 non-farm payrolls report, while talk that the Federal Reserve may keep rates elevated in September also weighed on sentiment, according to TradingKey. Memory shares were among the weakest performers, while energy names found support from firmer crude-linked trade.
TradingKey said SanDisk and Western Digital both posted strong quarterly results, but Goldman Sachs warned that expectations had become so elevated that even solid earnings might not be enough to lift the shares further. The bank also suggested the stocks could face near-term pressure from profit-taking and sentiment-driven selling.
The report added that Micron could be pulled into the same trade, given its overlap in end-market exposure with SanDisk. In other words, weakness in one memory maker can quickly spill across the group when investors start to question whether demand strength is already priced in.
Nvidia was another focus after The Information reported that the company is looking at reducing memory specifications for its next Rubin Ultra graphics processor because of tight supply of high-end high-bandwidth memory chips. That would be an important reminder that the AI boom is still running into hard supply constraints, even as the largest chip buyers and cloud companies continue to expand aggressively.
Elsewhere in the technology sector, the report said Apple and suppliers are moving to secure enough DRAM for upcoming iPhone models, while Alphabet is preparing a bond sale that could raise as much as $25 billion. Microsoft also began operating its fourth data centre region in India, underscoring how quickly capital spending around artificial intelligence is spreading across the sector.
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