- US stock markets opened lower due to rising oil prices and weak semiconductor stocks
- Dow Jones fell 0.29%, S&P 500 dropped 0.52%, Nasdaq declined 1.23% at market open
- Tech stocks, especially chipmakers, saw sharp declines amid profit booking pressure
US stock markets opened lower on Tuesday as investors weighed a sharp rise in oil prices, elevated Treasury yields and weakness across semiconductor stocks. Persistent inflation concerns and geopolitical uncertainty also weighed on sentiment, with technology and AI-linked stocks bearing the brunt of the selling pressure.
The Dow Jones Industrial Average fell 0.29%, or 153.52 points, minutes after open. The S&P 500 declined 0.52%, or 40.17 points, while the Nasdaq Composite dropped 1.23%, or 326.44 points. Tech stocks dragged down the Nasdaq, led by sharp declines in Western Digital (-7%), Sandisk (-6%), Marvell Technology (-6%), and Seagate Technology (-6%). Meanwhile, the Dow Jones Industrial Average dropped 191 points, or 0.4%.
The AI trade has been a major driver of gains across the technology sector, but elevated valuations have left chipmakers vulnerable to profit booking when broader risk appetite deteriorates.
Oil prices climbed for a third consecutive session as expectations of a near-term resolution to the US-Iran conflict weakened. Brent crude rose above $91 a barrel after settling at its highest level since late July, while West Texas Intermediate traded near $85 a barrel.
ALSO READ: AI Chip Trade Flips Again: Micron, Intel, SanDisk, Others Slump Up To 5%
US President Donald Trump has indicated that Washington is in no hurry to extend an agreement with Tehran, adding to uncertainty over the geopolitical outlook and the potential disruption to energy supplies. The two sides remain divided over several issues, including the Strait of Hormuz. Iran is negotiating with Oman over the management of the strategic waterway, while the US is not part of those discussions.
Trump has also threatened military action against Oman if it interferes with the US blockade, according to Fox News.
Rising oil prices and persistent inflation concerns have pushed US Treasury yields higher, creating another headwind for equities. The yield on the 30-year Treasury bond climbed to its highest level since 2007, while the benchmark 10-year Treasury yield remained near its highest level since January 2025.
Higher yields have been driven by concerns over elevated government spending as well as the potential inflationary impact of rising energy prices.
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