What Happened?

A number of stocks fell in the morning session after the U.S. jobs report for July came in significantly weaker than expected while new widespread import tariffs were announced, sparking fears of a potential economic slowdown. 

The U.S. economy added only 73,000 jobs, far below estimates, and massive downward revisions to the prior two months painted a much weaker picture of the labor market. This has stoked recession fears, which would directly impact demand for chips used in countless products. Compounding these worries, the White House announced new tariffs, including a 20% levy on imports from Taiwan, a global hub for chip manufacturing. This dual shock of slowing domestic growth and renewed trade friction creates a challenging outlook for the highly cyclical and globally connected semiconductor industry, leading to a broad-based sell-off.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Processors and Graphics Chips company Lattice Semiconductor (NASDAQ: LSCC) fell 3.2%. Is now the time to buy Lattice Semiconductor? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Amkor (NASDAQ: AMKR) fell 3.6%. Is now the time to buy Amkor? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 4.1%. Is now the time to buy Entegris? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company IPG Photonics (NASDAQ: IPGP) fell 3%. Is now the time to buy IPG Photonics? Access our full analysis report here, it’s free.
• Processors and Graphics Chips company Penguin Solutions (NASDAQ: PENG) fell 3.3%. Is now the time to buy Penguin Solutions? Access our full analysis report here, it’s free.

Zooming In On Entegris (ENTG)

Entegris’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 16 days ago when the stock dropped 3.5% on the news that a cautious outlook from semiconductor equipment giant ASML sparked a broad sell-off across the sector, hitting chipmakers and equipment suppliers alike. The negative sentiment was triggered after the Dutch firm, whose complex machines are essential for producing advanced chips, warned it could no longer guarantee growth in 2026. ASML's management cited "increasing uncertainty driven by macro-economic and geopolitical developments," including the potential for new U.S. tariffs. As an industry bellwether, a company whose performance is seen as an indicator of the entire sector's health, ASML's comments are a key signal of future capital spending. The warning sent a chill through the market, as concerns grow that trade tensions could disrupt the highly globalized semiconductor supply chain and slow down investment from chip manufacturers.

Entegris is down 22.8% since the beginning of the year, and at $75.07 per share, it is trading 35.6% below its 52-week high of $116.61 from September 2024. Investors who bought $1,000 worth of Entegris’s shares 5 years ago would now be looking at an investment worth $1,014.

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