Major U.S. indexes closed lower Tuesday as declines in Amazon and Alphabet weighed on technology shares while renewed uncertainty over the Strait of Hormuz kept oil prices elevated and added to inflation concerns.
By yourNEWS Media Newsroom
U.S. stocks finished lower Tuesday as weakness in several major technology names combined with fading optimism over a possible agreement to ease tensions in the Middle East.
Preliminary data showed the S&P 500 falling 25.32 points, or 0.33%, to 7,727.79. The Nasdaq Composite dropped 160.36 points, or 0.60%, to 26,445.00, while the Dow Jones Industrial Average declined 188.41 points, or 0.35%, to 53,787.57.
Amazon and Alphabet both fell, adding pressure to the S&P 500 and Nasdaq. SpaceX also declined.
Investors were simultaneously reassessing the outlook for the Iran conflict after the newly appointed secretary of Iran’s Supreme National Security Council said the Strait of Hormuz would remain closed unless Washington changes its behavior and accepts Tehran’s conditions for ending the war.
Brent crude futures remained near one-week highs during volatile trading, while the S&P 500 energy sector moved higher.
“As has been the case for months, it’s just really hard to come to an agreement that works for everyone. Oil is a little higher, pricing in more uncertainty around that,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“The market has obviously gyrated around this conflict at times, but it hasn’t been the big headwind that a lot of people imagined it might be.”
Higher energy prices stemming from the Iran conflict have added to inflation concerns and complicated the outlook for central banks around the world.
Those pressures are gaining attention ahead of U.S. consumer and producer inflation reports scheduled over the next two days.
The readings are expected to play an important role in shaping expectations for the Federal Reserve, particularly as Chair Kevin Warsh seeks to reduce the central bank’s reliance on forward guidance.
Traders remain divided over whether the Fed will raise interest rates at its September meeting, according to the CME FedWatch tool.
Despite Tuesday’s losses, Wall Street remains near record territory after strong quarterly earnings pushed the S&P 500 to all-time highs last week. The Nasdaq, meanwhile, was about 2% below its record closing high set June 2.
Investor enthusiasm surrounding artificial intelligence has also remained a source of support. Signs that large investments by Microsoft and Amazon in AI data centers are producing results have helped lift sentiment.
Alternative asset managers were among Tuesday’s stronger performers.
Apollo Global and Blackstone both rallied after being among the financial institutions that recently partnered with Nvidia to establish compute-financing platforms intended to mobilize more than $500 billion.
Several individual companies also made notable moves.
Jabil gained after UBS upgraded the electronics manufacturer to “buy” from “neutral.”
U.S.-listed shares of On fell sharply after the sportswear company missed sales estimates.
Venture Global also declined after the liquefied natural gas company reported second-quarter revenue that came in slightly below estimates.
The session left investors balancing two competing forces: continued optimism surrounding corporate earnings and AI investment against renewed geopolitical uncertainty, higher energy costs and questions about the Federal Reserve’s next move.
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