The three major U.S. stock indices fell on July 20, despite a rebound in semiconductor stocks. Rising military tensions in the Middle East, increasing international oil prices, and climbing U.S. Treasury yields weighed on investor sentiment. Caution also grew ahead of earnings reports from major technology companies.
On the New York Stock Exchange, the Dow Jones Industrial Average closed down 307.16 points (0.59%) at 51,839.26. The S&P 500 dropped 14.41 points (0.19%) to finish at 7,443.28, while the tech-heavy Nasdaq Composite fell 12.17 points (0.05%) to close at 25,508.07.
Early in the session, semiconductor stocks, which had recently experienced sharp declines, saw a surge in bargain buying. The Philadelphia Semiconductor Index briefly rose nearly 4% but ultimately ended up only 0.6%. This index has fallen more than 20% from its peak at the end of June, entering bear market territory.
Uncertainty surrounding the situation in the Middle East limited investor confidence. The Iran-aligned Houthi movement in Yemen declared a maritime blockade against Saudi Arabia, raising concerns about potential disruptions to oil supply. However, reports indicated that mediators had proposed a 10-day ceasefire to Iran to ease tensions with the U.S., leaving room for diplomatic solutions.
International oil prices increased, with September Brent crude rising by $1.12 to $89.22 per barrel, and West Texas Intermediate (WTI) crude gaining 74 cents to close at $83.23. The rise in oil prices raised concerns about inflation, pushing the yield on 10-year U.S. Treasury bonds to around 4.6%.
Investor caution was also evident ahead of the upcoming earnings reports from major tech firms, including Alphabet, Tesla, and Intel. Market participants are closely watching these reports to determine whether the recently surging tech stocks can sustain their high valuations. According to market research firm LSEG, the projected growth rate for S&P 500 companies' second-quarter net income is 26% year-over-year, up from a previous estimate of 23.7%.
Among individual stocks, Apple fell 2%, exerting the most significant downward pressure on the S&P 500. In contrast, Alphabet rose 1.5% following news that Google is developing new server chips to enhance AI efficiency. Domino's Pizza shares increased by 2.1% after reporting quarterly revenue that exceeded market expectations.
On the New York Stock Exchange, the number of declining stocks was 1.72 times greater than that of advancing stocks, while on the Nasdaq, declining stocks outnumbered advancing ones by 1.8 times. Although semiconductor stocks experienced some rebound, overall investor sentiment in the market remained cautious.
* This article has been translated by AI.
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