The New York Stock Exchange closed mixed as geopolitical tensions rose following President Donald Trump's announcement that the "memorandum of understanding (MOU) with Iran has ended." While the Dow Jones Industrial Average fell, semiconductor stocks rebounded, helping the tech-heavy Nasdaq maintain its upward trend.
On July 8, the Dow Jones Industrial Average finished down 1.09% at 52,348.39. The Standard & Poor's (S&P) 500 index dropped 0.28% to close at 7,482.71. In contrast, the Nasdaq composite rose 0.20% to finish at 25,870.65.
Markets closely monitored developments in the Middle East. During a NATO summit in Ankara, President Trump stated he has "no interest in further negotiations with Iran" and warned that the U.S. could launch additional airstrikes against the country.
Following these remarks, international oil prices surged, with Brent crude futures rising by 5.2%. The increase in oil prices reignited inflation concerns, leading to selling pressure in the bond market and a rise in Treasury yields. Speculation grew that the Federal Reserve's interest rate path could become more complicated.
Among the 11 sectors of the S&P 500, nine experienced declines. The industrial sector fell by 3.41%, and materials dropped by 2.45%. Airline and cruise stocks also weakened due to concerns over rising costs from higher oil prices. United Airlines and Delta Air Lines each fell by over 1%, while Carnival Corporation dropped 3.9% and Norwegian Cruise Line fell by 1.9%.
Conversely, semiconductor stocks helped mitigate some of the index declines. Broadcom surged 4.8% on expectations of a $30 billion semiconductor supply agreement with Apple. Nvidia rose 3.65% following reports that China would allow limited purchases of H200 chips from major AI companies. The Philadelphia Semiconductor Index increased by 2.23%.
Large tech stocks had mixed results. Microsoft and Alphabet each fell by over 1%, while Meta Platforms dropped 2%. However, the strength in semiconductor stocks lifted the Nasdaq, creating divergence among the major indices.
The International Monetary Fund (IMF) also weighed on investor sentiment by lowering its global growth forecast for the year to 3%. The IMF warned that the ongoing conflict in the Middle East and fluctuations in energy prices remain significant risks to the global economy.
Market analysts noted that the potential for a prolonged U.S.-Iran conflict and any disruptions to shipping through the Strait of Hormuz could be key factors influencing future stock market direction. In the short term, movements in oil prices, Treasury yields, the likelihood of Fed interest rate hikes, and the sustainability of the semiconductor stock rebound are expected to drive volatility in the New York Stock Exchange.
* This article has been translated by AI.
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