The three major U.S. stock indexes opened lower as heavy selling centered on semiconductor stocks continued. Investor sentiment weakened under intense selling pressure in chip names, and the armed clashes between the United States and Iran that have continued for a week also appeared to play a role.
As of 10:08 a.m. on the 17th (local time), the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) fell 21.09 points, or 0.04%, to 52,531.88. The Standard & Poor's (S&P) 500 fell 46.06 points, or 0.61%, to 7,487.71, and the Nasdaq composite dropped 335.79 points, or 1.30%, to 25,546.16 in transaction.
Nvidia slipped more than 3% intraday, briefly ceding the top spot in market capitalization to Apple. Nvidia is currently down 1.2% from the previous session at $204.82 in transaction. The Philadelphia Semiconductor Index also fell 1.22%.
On top of that, concerns that Chinese artificial intelligence (AI) models will reduce demand for cutting-edge AI chips sent AI Semiconductor stocks plunging. The Chinese AI startup Moonshot said its newly unveiled Kimi K3 model can compete with the most powerful products from OpenAI and Anthropic. This is similar to the situation in January, when U.S. tech stocks tumbled on news that the Chinese startup DeepSeek had developed a high-performance AI model at low cost.
The escalation of armed clashes between the United States and Iran also led to weakness. Iran attacked a power plant and seawater desalination facilities in Kuwait on the day. The facilities were damaged and caught fire. The Islamic Revolutionary Guard Corps (IRGC) also carried out a surprise attack on the U.S. Al Udeid Air Base in Qatar.
As the armed clashes between the United States and Iran continue, caution over transits through the Strait of Hormuz is growing. On the 16th, only eight ships passed through the Strait of Hormuz, the lowest in three weeks. In particular, as military tensions between the two countries rose, oil prices also climbed, likely fueling risk-off sentiment.
Disappointment over Netflix's earnings outlook also appears to have partly affected the stock's move. Netflix's second-quarter earnings per share (EPS) met expectations, but disappointment with its annual guidance (revenue outlook) sent the stock down 8.84%. Netflix guided for annual revenue of $51.0 billion to $51.4 billion. Compared with its transfer guidance of $50.7 billion to $51.7 billion, the top end was revised down.
Alphabet fell 2.02% on news that Google delayed the launch of its Gemini AI model. SpaceX also halted the launch of its Starship super-heavy rocket, sending the stock down 3.79%. Chief Executive Officer Elon Musk said, "Some engines were not working, triggering an automatic abort," and added, "We will try again in the coming days."