On the 20th (local time), the New York stock market closed lower amid military clashes between the United States and Iran and rising international oil prices.
However, with expectations for a diplomatic resolution continuing, bargain hunting centered on semiconductor and artificial intelligence (AI) stocks that had fallen sharply limited the decline in the indexes.
On the New York stock market, the Dow Jones Industrial Average finished at 51,839.26, down 307.16 points, or 0.59%, from the previous session.
The Standard & Poor's (S&P) 500 fell 14.41 points, or 0.19%, to 7,443.28, and the tech-heavy Nasdaq composite ended down 12.17 points, or 0.05%, at 25,508.07.
Stocks opened higher but investors kept a close eye on the Middle East.
As tit-for-tat airstrikes between the United States and Iran continued, Yemen's Iran-aligned Houthi rebels declared a maritime blockade against Saudi Arabia.
U.S. President Donald Trump said on Truth Social, "Iran will pay a price many times over for each U.S. service member it kills," warning of retaliation.
However, anxiety eased somewhat after the Iranian Foreign Ministry Spokesperson said back-channel diplomatic contacts were underway.
Semiconductor-related stocks, which saw a steep correction last week, rebounded.
Micron Technology rose 1.94%, and bargain hunting flowed into AI-related names such as AMD (1.58%) and Astera Labs (1.80%).
In contrast, the American depositary receipt (ADR) of SK hynix fell 1.86%.
Louis Navellier, chief investment officer (CIO) at U.S. asset manager Navellier & Associates, said, "The Iran situation continues to rattle the market."
He explained that despite an environment conducive to stock gains from solid corporate earnings, geopolitical tensions are blocking the advance.
Tom Essaye, founder of the Sevens Report, also noted, "For the market to rebound, we need to see both strong results from big tech companies and signs of stabilization in the Middle East."
With geopolitical risks persisting, major technology companies are set to report second-quarter results this week.
Starting with Tesla and Alphabet on the 22nd, corporations' AI investment results and forward guidance are expected to set the market's direction.
September-delivery Brent and August-delivery West Texas Intermediate (WTI) futures rose 1.27% and 0.90% from the prior session to settle at $89.22 and $83.23 per barrel, respectively.