The Dow Jones Industrial Average (^DJI -1.25%) tumbled on Tuesday after President Donald Trump suggested that a trade deal between the U.S. and China may not be signed until after the election next year . The Dow was down 1% at 3:35 p.m. EST.

Both Intel (INTC -3.79%) and Dow Inc. (DOW) badly lagged the market. Intel was down after Amazon (AMZN -2.99%) announced a new server chip, and Dow sank following an analyst downgrade.

Intel heads lower as Amazon unveils new homegrown chip

Intel's main growth engine over the past few years has been its data center business, specifically the high-powered chips being sold to cloud computing companies. As demand for cloud infrastructure has exploded, so has demand for the chips that crunch the numbers in the background.

Increasingly, those same cloud computing companies are dedicating resources to designing their own chips. The latest development on that front is Amazon's Graviton2, the second iteration of the company's ARM-based server chip. Shares of Intel were down about 2.6% on the news.

A circuit board.

Image source: Getty Images.

While Amazon's new chip won't be able to replace Intel's chips for all workloads, Amazon is pitching Graviton2 as offering substantially better price-to-performance than Intel chips. Amazon claims that instances of its Elastic Compute Cloud powered by Graviton2 can offer up to 40% better price-to-performance than instances running on either Intel or AMD processors.

Compared to the first-generation Graviton processors, the second-gen version sports a seven-fold increase in performance, a four-fold increase in compute cores, double the cache, and a five-fold increase in memory speed.

With Amazon ramping up its in-house chip efforts, and with AMD gaining market share in the data center, Intel's highly profitable data center business will face plenty of challenges going into 2020.

Dow Inc. gets a downgrade

Shares of chemical manufacturer Dow were down 2.8% Tuesday, hit by an analyst downgrade on Monday afternoon. Morgan Stanley downgraded the stock to "equal weight," the equivalent of "hold," and slapped on a $58 price target. The stock currently trades for around $51.50 per share.

Morgan Stanley prefers LyondellBasell over Dow, resuming coverage on the former with an "overweight" rating and a $110 price target. Morgan Stanley analyst Vincent Andrews sees LyondellBassell as offering the best risk/reward in the commodity chemical industry going into 2020.

Dow's recent results have been rough. Third-quarter revenue was down 15% year over year, mostly due to lower prices, while adjusted earnings per share tumbled 32%. The company is working to cut costs, finding $40 million of savings in the third quarter. "Moving forward, we will continue to leverage our feedstock flexibility; advance lower-risk, higher return growth investments; and achieve our stranded cost removal target," said CEO Jim Fitterling.

Shares of Dow aren't all that cheap, trading for nearly 15 times the average analyst estimate for adjusted earnings in 2019. If the company's results continue to deteriorate, the stock could head even lower.