New York stocks finished lower, unable to extend their gains as uncertainty over end-of-war talks between the United States and Iran resurfaced. Profit-taking hit recently surging semiconductor shares, weighing on overall market sentiment.
On the 7th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 49,596.97, down 0.63% from the previous day. The Standard & Poor's (S&P) 500 index fell 0.38% to 7,337.11, and the Nasdaq closed down 0.13% at 25,806.20. The S&P 500 and Nasdaq set intraday record highs and looked poised to extend gains, but as uncertainty over talks between the United States and Iran came into focus, they gave up gains in the afternoon and turned lower.
According to the Wall Street Journal (WSJ), a senior Iranian official said, "We cannot allow the United States to reopen the Strait of Hormuz and exit the war without any compensation." There was also a report that, after Saudi Arabia and Kuwait reversed decisions to halt U.S. military aircraft overflight, the United States is reviewing resuming "Project Freedom," which would help merchant ships stuck in the Strait of Hormuz escape.
On concerns that Middle East tensions could heat up again, international oil prices also pared losses. Brent futures fell intraday to the $96-per-barrel level, plunging nearly 5%, but ultimately recouped most of the decline to finish at $100.06, down 1.2% from the previous session. West Texas Intermediate (WTI) futures also ended down 0.3% at $94.81 per barrel.
Semiconductor stocks that had surged on hopes for artificial intelligence (AI) demand broadly corrected on the day. AMD fell 3.10%, while Intel (-3.00%) and Micron (-2.97%) also posted declines of around 3%. As these shares had nearly doubled over the past month on expectations for expanding AI data center demand, profit-taking pressure appears to have intensified.
Arm, the U.K. semiconductor design company, took a bigger hit. As doubts emerged about its in-house AI chip production capacity, the stock plunged 10.1% on the day, giving back in a single session the gains it had made on strong earnings.