Chipmakers' sell-off and a new escalation in Iran: How the market opened
Photo: Samuel Boivin / Shutterstock.com
U.S. stock indices fell at the opening bell amid a new round of escalation in the Middle East. The S&P 500 fell 0.3%, the tech-heavy Nasdaq Composite lost 0.9%, and the Dow Jones Industrial Average was the only index to post a gain, rising 0.2%.
Oil prices jumped by more than 3%. Futures for the benchmark Brent crude rose 3.5% and were trading at $78.7 per barrel at the opening of the session.
Semiconductor stocks came under pressure: SK Hynix’s American Depositary Receipts (ADRs), which began trading on the Nasdaq last Friday, plummeted 7.5%. Micron Technology and SanDisk shares fell 6.5% and 9.3%, respectively, while Seagate Technology shares dropped 5.5%. AMD and Intel shares fell 4.5%.
What's Happening Between the U.S. and Iran
The U.S. will take control of the Strait of Hormuz, President Donald Trump said in an interview with Fox News on July 13. According to him, Washington will become the “guarantor of security” for this key route for global oil and gas trade. The U.S. leader said that during 11 hours of talks on Sunday, the parties “agreed on everything,” but Tehran later indicated that “a couple of changes” needed to be made.
Over the weekend, the U.S. and Iran exchanged blows once again, with the conflict spreading across much of the Middle East. Specifically, Iranian forces attacked a container ship in the Strait of Hormuz, as well as U.S. targets in several Gulf countries. Both sides claimed to be in control of this maritime artery. The Islamic Revolutionary Guard Corps announced on Saturday that it was closed “until further notice,” but the U.S. military denied this.
Following Trump's remarks on Monday, a senior adviser to Iran's supreme leader warned that Tehran would fight to maintain control of the strait.
“The closure of the strait will continue to weigh on market sentiment, boosting demand for safe-haven assets,” wrote Ben Ammons, founder of Fed Watch Advisors, as quoted by CNBC. “However, unless there is a real prospect in the coming months of a prolonged closure capable of triggering a serious global energy shortage, market attention this week will also focus on inflation data, [Federal Reserve Chair Kevin] Warshe, and [upcoming] bank earnings reports.”
This article was AI-translated and verified by a human editor
