Why Intel Stock Is Crushed Today

Intel (INTC -8.51%) shares are down in trading on Tuesday. The company’s share price was down 8.3 percent as of 2:45 p.m., according to data from S&P Global Market Intelligence.

Intel shares are losing today due to macroeconomic and geopolitical risk factors. Investors are worried that weak manufacturing and a U.S. jobs report later this week could roil the market, and fears that China will invade Taiwan are back in the spotlight.

Is a recession on the horizon?

Investors have been eagerly waiting for the Federal Reserve to cut interest rates, and it looks like the central bank is on track to deliver the much-anticipated cut this month. But the latest data shows that US manufacturing retreated in August, and investors are now worried that the anticipated rate cut will not be the macroeconomic catalyst for the market that was expected.

The Fed tried to keep inflation under control while avoiding recession — the much-desired “soft landing” scenario. Inflation has moderated substantially, but recent US economic data on other fronts has raised concerns that a soft landing may be off the books.

Some recent economic data came in weaker than expected, and earlier employment numbers were subject to significant downward revisions. The US Labor Department is expected to release jobs figures for August, and the big sell-off in Intel shares and the broader market reflected concerns that the numbers would point to a recession.

The China-Taiwan dynamic is also hitting Intel shares

Signs of a potential Chinese invasion of Taiwan have been a recurring catalyst for semiconductor stocks over the past year. While the excitement surrounding artificial intelligence and other growth drivers has been enough to generate big valuation gains for many chip companies, geopolitical risk remains a pressing concern for chip investors. Recent comments by the Taiwanese president have once again given these concerns center stage.

In an interview on Sunday, Taiwanese President Lai Ching-te said China should also try to get territory back from Russia if it claims a right to previous land holdings as a rationale for Taiwan’s potential reintegration . While the comment was likely made in jest as a way to highlight a perceived inconsistency in China’s policy positioning, it also suggests that potentially aggressive moves by Tawain’s more powerful neighbor are an immediate concern for the country’s leader.