Why ASML Stock Sank Today

Core Viewpoint - ASML's stock experienced a significant decline despite reporting better-than-expected Q1 earnings, primarily due to macroeconomic and geopolitical pressures impacting investor sentiment [1][4]. Financial Performance - ASML reported earnings of 6 euros per share on sales of 7.74 billion euros, exceeding market expectations by 0.20 euros per share, although revenue fell short by approximately 40 million euros [3]. - Year-over-year, sales increased by 46%, and the company maintained its full-year sales guidance between 30 billion euros and 35 billion euros, with a gross margin forecast of 51% to 53% [3]. Market Reactions - The stock price fell by 7% during trading, with a peak decline of 8.6%, while the S&P 500 and Nasdaq Composite also experienced declines of 2.2% and 3.1%, respectively [1][2]. - The bearish market reaction was influenced by new tariffs on Chinese goods and expanded export restrictions on processors from Nvidia and AMD [5][6]. Macroeconomic Context - The Trump administration announced an increase in tariffs on Chinese goods from 145% to 245%, contributing to market uncertainty [5]. - Federal Reserve Chairman Jerome Powell indicated that the Fed is unlikely to cut interest rates soon, as the effects of new tariffs on inflation and economic growth need to be assessed [6].