As semiconductor stocks plunged and international oil prices jumped, the three major U.S. stock indexes in New York closed lower on the 7th (Eastern time).
The Dow Jones Industrial Average fell 130.76 points, or 0.25%, to close at 52,925.15. The Standard & Poor's (S&P) 500 dropped 33.58 points, or 0.45%, to 7,503.85, and the tech-heavy Nasdaq composite ended down 302.47 points, or 1.16%, at 25,818.69.
Investor sentiment toward global semiconductor stocks, including Samsung Electronics, remained weak. Intel and Micron shares fell 9.7% and 4.7%, respectively, and other major chip names also broadly declined. The VanEck Semiconductor ETF (SMH), a proxy for the sector, fell 3.8%.
Morgan Stanley said the rally in semiconductor stocks is losing momentum as investors rotate funds into relatively lagging sectors, including hyperscalers (large-scale data center operators). It added, "It is not sustainable for such a gap between sectors to persist."
News that three ships transiting the Strait of Hormuz had been attacked since the previous day also weighed on stocks as international oil prices surged. September delivery Brent and August delivery West Texas Intermediate (WTI) futures settled up 3.01% and 2.76% from the prior session at $74.16 and $70.44 a barrel, respectively. They marked the biggest gains since June 1.
International oil prices extended gains in after-hours trading on news that the Donald Trump U.S. administration would end waivers on sanctions for Iranian oil.