The S&P 500 (SNPINDEX:^GSPC) fell 0.74% to 7,553.68, the Nasdaq Composite (NASDAQINDEX:^IXIC) slipped 0.89% to 26,853.98, and the Dow Jones Industrial Average (DJINDICES:^DJI) dropped 1.21% to 50,687.07 as surging oil, higher yields, and geopolitical tensions pressured markets.
Market movers
Tech megacaps Nvidia and Microsoft both fell by more than 3%, weighing on the S&P 500 and Nasdaq. Semiconductor sentiment stayed upbeat with gains from memory chip stocks like Sandisk and Micron Technology. Intel erased some of its recent losses and Marvell Technology extended its rally — it is now up over 50% in the past five days.
What this means for investors
U.S. indexes ended their winning streak today as investors grew cautious amid reports of escalating tensions in the Middle East. The S&P 500 topped 7,600 for the first time after nine consecutive days of gains, but doubts about the U.S.-Iran peace negotiations caused oil prices to rise and stocks to falter.
Strong earnings have helped reassure Wall Street that the booming artificial intelligence (AI) trade is sustainable, but valuations and spending are coming under increasing scrutiny. For example, if AI adoption doesn’t happen as quickly or broadly as expected, there will be considerable unused capacity. One way investors can prepare is to balance tech exposure with defensive and dividend stocks.
Another reason to brace for turbulence is that some analysts warn upcoming mega-IPOs could drain liquidity from existing stocks. SpaceX, Anthropic, and OpenAI are all expected to go public this year, with combined valuations of over $3 trillion, which could present a short-term headwind for markets.
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