"Reality Check": Tensions with Iran Have Halted the Rally in U.S. Stocks

Major U.S. stock indices closed in negative territory on July 20. Despite gains early in the session, the S&P 500, Nasdaq Composite, and Dow Jones lost momentum and turned negative after U.S. President Donald Trump stated that Iran would “pay” for the killings of American military personnel.

Against this backdrop, the broad U.S. stock index, the S&P 500, fell 0.19%; the tech-heavy Nasdaq Composite dropped a nominal 0.05%; and the blue-chip Dow Jones Industrial Average fell 0.59%.

Brent crude approached its intraday highs, trading at $88.8 per barrel, while WTI rose to $83.

CNBC notes that semiconductor manufacturers, which fell into “bear” territory last week, tried throughout the day to at least partially recoup last week’s losses. For example, the Philadelphia Semiconductor Index, which jumped more than 3% during the day, ultimately closed up 0.6%.

“Deals in the semiconductor and AI sectors are undergoing a healthy reality check,” said Darrell Cronk, president of Wells Fargo Investment Institute, commenting on the market situation (as quoted by CNBC). “While a short-term tactical rebound would not be unexpected, given how oversold the market is, the medium-term uptrend has been broken,” he added.

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