Nasdaq Slides Nearly 2% As Higher Treasury Yields, Soaring Oil Prices Pressure Tech And Chip Stocks — META, AMZN, SPCX, MSFT In Focus

• The S&P 500 ended 0.5% lower, while the Nasdaq 100 lost 1.8% and the Dow Jones Industrial Average fell 0.3%.
• The Philadelphia Semiconductor Index (SOX) fell nearly 5%.
• Iran attacked a Qatari liquefied natural gas tanker, sending oil prices higher.   

U.S. stock indices ended lower on Tuesday as investors sold off high-growth tech and chipmaker stocks as Treasury yields spiked owing to a jump in oil prices after Iran attacked a Qatari shipment in the Strait of Hormuz. 

The S&P 500 ended 0.5% lower, while the Nasdaq 100 lost 1.8% and the Dow Jones Industrial Average fell 0.3%. The Russell 2000, which tracks stocks with small market capitalizations, dropped 1%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.5% and Invesco QQQ Trust (QQQ) ended Tuesday around 1.7% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 0.4%. 

Meanwhile, the VanEck Semiconductor ETF (SMH) lost 3.8%. The Philadelphia Semiconductor Index (SOX) tanked nearly 5%, signaling a resurgence in rotation out of AI stocks.

Retail sentiment on Stocktwits for SPY, QQQ and DIA was between ‘extremely bullish’ and ‘bullish’ zones with ‘normal’ to ‘high’ message volumes.

US Market Drivers

Oil prices surged after Iran attacked a Qatari liquefied natural gas tanker in the vicinity of the Strait of Hormuz. International benchmark Brent crude futures rose by 5% at $75.69 per barrel. Similarly, U.S. West Texas Intermediate futures advanced nearly 5% to hover at $71.91 at the time of writing.

The U.S. Treasury Department, in response, revoked the waiver that allowed Iran to sell its oil worldwide, pushing oil prices even higher. Treasury yields spiked as rising oil fanned investor concerns that higher energy costs could fuel inflation. 

Meanwhile, concerns about the longevity of the AI bull run resurfaced as investors continued to question the returns from bloated capex plans, capacity metrics and increasing competition in the AI space. In Asian markets, South Korea’s Kospi dropped about 5% on weakness in Samsung shares even after the consumer electronics and memory firm reported stellar second-quarter profits. 

“While we remain confident in AI’s growth story and continue to see attractive opportunities in semis and hardware, we have also highlighted that the next leg of equity gains is likely to be marked by a broadening of market leadership,” Ulrike Hoffmann-Burchardi, Chief Investment Officer at UBS told Bloomberg. “Investors should ensure diversified exposure.” 

Trending Stocks To Watch 

Amazon.com (AMZN): The company is looking to ​raise at least $25 billion through a U.S. dollar bond sale, according to multiple media reports. 

Microsoft (MSFT): The company quietly initiated a major shift in its artificial intelligence strategy, beginning to substitute AI models from OpenAI and Anthropic with its own proprietary models. 

Meta Platforms (META): The Facebook owner announced the deployment of Muse Image, its first standalone image generation model developed by Meta Superintelligence Labs.  

SK Hynix (SKHY): South Korean chipmaker SK Hynix appears set for a blockbuster U.S. market debut, with its planned $28 billion listing drawing overwhelming investor demand as the offering has already been oversubscribed multiple times ahead of pricing later this week. 

SpaceX (SPCX): Wall Street embraced SpaceX with a wave of bullish calls on Tuesday following its blockbuster IPO. But one firm broke from the consensus. 

Read More: META Stock Jumps Over 3% To One-Month High — Meta Launches First AI Image Model

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