New York stocks closed lower across the three major indexes as a surge in global oil prices amid rising Middle East tensions combined with the burden of artificial intelligence (AI) investment by big tech companies.
On the 23rd (local time) in the New York stock market, the Dow Jones Industrial Average ended at 51,711.65, down 506.93 points, or 0.97%, from the previous session's close.
The Standard & Poor's (S&P) 500 index fell 90.66 points, or 1.21%, to 7,408.30, and the tech-heavy Nasdaq composite ended at 25,137.69, down 553.21 points, or 2.15%.
Brent crude, the global benchmark, topped $100 a barrel for the first time in two months, spurring investors.
September Brent crude futures finished at $100.69 a barrel, up 7.04% from the previous session. September West Texas Intermediate (WTI) futures settled at $92.19 a barrel, up 6.17%.
Brent is at its highest level since May 22, and WTI is at its highest since June 4.
Supply concerns grew as a Saudi tanker was attacked in the Red Sea amid worries about disruptions to traffic in the Strait of Hormuz, a key route for international crude shipments.
Earlier, Yemen's Iran-aligned Houthi rebels declared a blockade of the Red Sea targeting Saudi Arabia, and a day earlier two Saudi tankers were hit by airstrikes. The Houthis said they carried out the attacks.
In response, the United States continued airstrikes on Iran for a 12th straight day. Former President Donald Trump also suggested the possibility of a large-scale strike on Iran.
Rising oil prices stoked inflation fears, lifting U.S. bond yields. The 10-year U.S. Government Bonds yield rose 4 basis points (1 bp = 0.01 percentage point) from the previous session to 4.70%. It is the first time in a year and six months since January last year that the 10-year U.S. Government Bonds yield has topped 4.7%.
The possibility of a Federal Reserve (Fed) benchmark rate hike also reemerged.
Weekly new U.S. jobless claims released that day fell to the lowest level since 1969, reaffirming a solid labor market. As a result, expectations grew that the Fed will continue to prioritize price stability.
Earnings announcements by major tech companies also pushed stocks lower.
Tesla dropped 14.5% after it released that it recorded negative cash flow (cash burn) for the first time in two years.
Alphabet, Google's parent, posted second-quarter results that beat market expectations, but the stock fell 6.8% as free cash flow (FCF) turned negative due to large-scale AI infrastructure investments.