Wall Street’s technology-heavy Nasdaq and the benchmark S&P 500 traded lower on Tuesday as weakness in semiconductor stocks prompted investors to reassess the strength of the artificial intelligence-driven market rally.
The decline followed a broader sell-off across , led by a sharp 4.9% fall in South Korea’s benchmark index after chipmaker Samsung Electronics reported strong quarterly profits but failed to ease growing concerns about the long-term sustainability of the AI-fuelled boom.
At 09:58 a.m. ET, the Dow Jones Industrial Average rose 14.18 points, or 0.03%, to 53,070.09, the S&P 500 fell 25.30 points, or 0.34%, to 7,512.13, and the Nasdaq Composite lost 267.74 points, or 1.02%, to 25,853.42.
At the opening bell, the Dow Jones Industrial Average rose 48.1 points, or 0.09%, to 53104.06. The S&P 500 fell 20.8 points, or 0.28%, to 7516.63, while the Nasdaq Composite dropped 161.0 points, or 0.62%, to 25960.13.
Investor sentiment was also influenced by fresh US economic data released on Tuesday morning, which showed the country’s trade deficit widened in May to its largest level in more than a year. The figures were largely in line with market expectations and did little to alter the broader economic outlook.
“Some people blame it on profit-taking, other people are saying that these numbers were underwhelming and creating a renewed angst on those huge AI names,” said Art Hogan of B. Riley Wealth Management, according to AFP.
“It is taking a bit of a bite out of the chips here (in the US) this morning, which have been on a real rollercoaster,” he said.
Market participants are now turning their attention to the minutes from the Federal Reserve’s latest policy meeting, scheduled for release on Wednesday. The document is expected to provide further insight into policymakers’ views on the path of interest rates following the central bank’s first meeting under Chair Kevin Warsh.
Investors will closely analyse the minutes for clues on the Fed’s assessment of inflation, economic growth and the timing of any future monetary policy adjustments.
Key Stock Movers
Nvidia shares fell 1.8% after Reuters reported Chinese startup DeepSeek is developing its own AI chip.
Stocks of Intel sank 8.2% and Micron shed 7.3%.
Shares of Elon Musk’s SpaceX declined 4.5% on the first day of trading on Nasdaq-100 index.
Rivian stock plunged 13.3% after the electric-vehicle maker launched an offer to sell 75 million shares.
Fiserv equity surged 3.5% after media reports that the payments firm held talks with JPMorgan and Bank of America to sell its payments infrastructure business handling debit card transactions.
Bullion
were flat on Tuesday, as investors monitored escalating hostilities in the Middle East.
At 09:01 a.m ET (1301 GMT), spot gold was little changed at $4,168.62 per ounce. USgold futures for August delivery rose 0.3% to $4,180.50.
Among other metals, spot silver dropped 1% to $61.48 per ounce. Platinum rose 1.2% to $1,650.47,and palladium gained 0.8% to $1,278.56.
Crude Oil
Crude oil prices surged on Tuesday after reports of attacks on vessels near the Strait of Hormuz reignited concerns over the security of one of the world’s most critical energy shipping routes, raising fears of potential disruptions to global oil supplies.
According to Reuters, a Qatari liquefied natural gas (LNG) tanker and a Saudi-flagged crude oil tanker sustained damage near the Hormuz after missiles were reportedly fired overnight by Iran’s Revolutionary Guards at vessels navigating the strategic waterway.
Brent crude futures gained 76 cents, or 1.1%, to $72.75 a barrel, while US West Texas Intermediate crude rose 73 cents, also 1.1%, to $69.28 a barrel at 1256 GMT.