New York, Feb 3, 2026, 12:46 (ET) — Trading hours
- KLA shares dropped roughly 4.5% by midday, lagging behind key chip-equipment rivals.
- The partial U.S. government shutdown has delayed crucial labor-market data, increasing uncertainty around interest rates and risk appetite.
- Alphabet and Amazon earnings reports this week are under the microscope as investors hunt for clues on AI and cloud spending.
KLA Corporation shares dropped 4.5% to $1,346.85 by midday Tuesday, sliding alongside other semiconductor equipment firms as the broader tech sector weakened. Applied Materials, Lam Research, and ASML all fell between 3% and 4%, with semiconductor ETFs dipping roughly 3%.
This shift is significant since chip-equipment shares have been heavily favored, fueled by bets that AI investment will sustain factory activity, while valuations remain tight. On Tuesday, a drop in software and cloud stocks weighed on the S&P 500 and Nasdaq, despite a rotation into smaller-cap names. (Reuters)
The partial U.S. government shutdown is stirring up fresh uncertainty. The Labor Department announced a delay in the January jobs report, while the December Job Openings and Labor Turnover Survey (JOLTS), which tracks monthly job openings, has also been pushed back. (AP News)
KLA had been losing ground before Monday’s close, slipping 1.22% to $1,410.45. That’s a noticeable drop from its recent 52-week peak of $1,693.35, reached on Jan. 29, according to MarketWatch data. (MarketWatch)
The company’s recent quarterly results remain somewhat in the background. KLA beat estimates late last week, but investors zeroed in on whether growth can pick up pace again after its strong run leading up to the report. “The stock had already sprinted into the print,” noted Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. (Reuters)
KLA supplies process control and yield management tools — inspection and metrology gear that detects defects and measures features in chip production. This positions the company as a barometer for factory utilization and spending among advanced logic, memory, and packaging clients. (Reuters)
But the situation isn’t all upside. KLA has often warned about risks from China demand and trade tensions; given that China has accounted for a significant portion of its recent revenue, the company faces potential hits if export controls worsen or clients push back on tool installations. (Reuters)
Traders are gearing up for megacap tech earnings, looking for signs on AI and cloud spending that could impact semiconductor demand. Alphabet will release its results on Feb. 4, with Amazon following on Feb. 5. (Alphabet Investor Relations)
