The U.S. stock market's three major indices fell sharply as tensions between the United States and Iran escalated. Oil prices surged nearly 10%, raising concerns about inflation. The Nasdaq, heavily weighted with technology stocks, experienced the largest drop as semiconductor shares plummeted.
On July 13, the Dow Jones Industrial Average closed down 138.31 points (0.26%) at 52,498.70. The S&P 500 index fell 59.92 points (0.79%) to 7,515.47, while the Nasdaq Composite dropped 408.43 points (1.55%) to 25,873.18.
Investor sentiment weakened as President Donald Trump announced plans to resume maritime blockades against Iranian ports following a weekend of large-scale airstrikes exchanged between the two nations. Concerns grew that oil shipments through the Strait of Hormuz could be disrupted again.
International oil prices soared, with West Texas Intermediate (WTI) crude for August delivery rising 9.4% to $78.14 per barrel. September Brent crude also climbed 9.6%, closing at $83.30.
The rise in oil prices bolstered energy stocks, which helped limit the Dow's losses. However, technology stocks were the weakest among the 11 sectors in the S&P 500. There is growing apprehension that sustained high oil prices could lead to increased corporate costs and consumer prices.
Semiconductor stocks faced particularly steep declines. Shares of SanDisk, Marvell Technology, and Intel fell between 6.1% and 12.6%. Profit-taking followed a recent surge in AI and memory semiconductor stocks.
SK Hynix's American Depositary Receipts (ADR), which began trading on the Nasdaq last week, plummeted 9.3%. After an initial rise of over 12% on its first day, investors appeared to be cashing in on profits. The sharp declines in SK Hynix and Samsung Electronics on the Korean stock market also impacted U.S. semiconductor stocks.
Bond yields rose as well. The yield on the 10-year U.S. Treasury note increased by 5.06 basis points to 4.62%. The yield on the more sensitive two-year note rose 6.71 basis points to 4.275%, the highest level since February of last year. The market is pricing in at least one potential interest rate hike by the Federal Reserve by the end of the year.
Investors are closely watching the upcoming U.S. Consumer Price Index (CPI), Producer Price Index (PPI), and retail sales data. Federal Reserve Chair Kevin Warsh is also scheduled to testify before Congress. The second-quarter earnings season is set to kick off with reports from major banks including JPMorgan Chase, Goldman Sachs, and Bank of America.
* This article has been translated by AI.
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