ASML Slumps Nearly 4% Ahead of Earnings, $1,700 Defense Line Under Threat

TradingKey - On the eve of its earnings report, ASML once again tests $1,700; a break below this level could trigger a further decline of over 10%.

On July 13, Eastern Time, photolithography giant ASML ( ASML )'s New York ADRs extended their decline, falling another nearly 4% to close at $1,726.04, widening its losses over the past half-month to 15%. Crucially, amid a fragile market environment, ASML's stock price once again touched its lowest point in the last half-month, instantly triggering a full-scale alarm for the psychological support level at $1,700.

The market originally expected ASML's second-quarter revenue to benefit from strong AI demand, growing nearly 15% year-over-year to reach 8.88 billion euros. However, the sudden plunge in ASML's share price ahead of its earnings was primarily driven by the double whammy of a sharply worsening geopolitical crisis in the Middle East and a collective de-bubbling of the semiconductor sector, leading to indiscriminate selling.

Yesterday, the South Korean stock market experienced a "Black Monday" as the KOSPI plunged 9%, triggering circuit breakers, while ASML's two super clients also collapsed, with SK Hynix ( SKHY) plummeted over 15%, while Samsung Electronics plunged more than 10%. The collapse in customers' share prices and market positions directly sparked extreme fear on Wall Street that upstream semiconductor equipment orders could face delays or revisions.

In addition, the Strait of Hormuz faced a potential blockade, pushing up international oil prices and casting a shadow of resurgent inflation over the upcoming US June CPI data. The market is extremely concerned that the new Federal Reserve Chairman, Kevin Warsh, will send highly hawkish signals in his congressional debut. Seeking a safe haven, capital indiscriminately liquidated high-valuation tech heavyweights.

For bulls, $1,700 is not just a psychological level, but ASML's technical "Maginot Line." The dividend from the organization's optimization—stemming from a massive layoff of 1,700 management personnel initiated in early January to streamline its structure and boost R&D efficiency—was originally expected to manifest in the second half of the year. If ASML's price breaks below $1,700, it means the market will completely disregard its internal fundamental improvements while entering a technical structural correction, exposing the deep-water zone at $1,500 below, representing another 11% downside from current levels.

ASML Stock Chart, Source: TradingView

Over the next 48 hours, two key events warrant close attention: first, the US June CPI data to be released today—if core inflation exceeds expectations, macro liquidity will tighten further, and $1,700 could be lost ahead of the earnings release; second, ASML's official Q2 earnings release tomorrow, where the most critical factor is whether the latest guidance for sub-2nm high-end photolithography machines in 2027 has faced order cuts from TSMC or South Korean clients.