Wall Street Falls as Tech Stocks Slide and U.S.–Iran Tensions Escalate

U.S. stocks moved lower on Monday as renewed conflict in the Middle East triggered a broad risk-off move across financial markets.

Investors also reacted to conflicting reports about whether the Strait of Hormuz had been closed to commercial shipping.

The geopolitical uncertainty arrived just before the start of a major second-quarter earnings season, which could test whether high stock-market valuations remain justified.

S&P 500, Nasdaq and Dow Move Lower

At 12:14 ET, the S&P 500 was down 0.5% at 7,539.93 points.

The technology-heavy Nasdaq Composite fell 1.1% to 26,007.44 points.

Meanwhile, the Dow Jones Industrial Average declined 0.3% to 52,478.78 points.

Technology stocks suffered the largest losses as weakness in global semiconductor shares added to the cautious market tone.

U.S. and Iran Exchange More Strikes

U.S. Central Command said American forces carried out additional attacks on Iranian targets over the weekend.

Separate reports indicated that Iran responded by targeting U.S. military facilities across the Middle East.

The latest exchange marked another deterioration in relations between Washington and Tehran.

President Donald Trump said last week that the ceasefire with Iran had ended. However, he also suggested that Tehran had contacted the United States about restarting talks.

Conflicting Claims Surround the Strait of Hormuz

Iran said the Strait of Hormuz had been closed to commercial shipping.

U.S. Central Command disputed that claim and maintained that the waterway remained open.

The Strait of Hormuz is one of the world’s most important oil-export routes. Therefore, uncertainty over shipping access quickly affected global energy markets.

Oil Prices Rise on Supply Fears

Oil prices climbed sharply following the latest military developments.

The rally increased concerns that higher energy costs could create fresh inflation pressure.

Persistent inflation could encourage the Federal Reserve to maintain a more restrictive interest-rate policy in the coming months.

However, Brent crude remained below the peaks reached during the early stages of the U.S.–Iran conflict.

Global Chip Sell-Off Hits Technology Stocks

Technology shares came under additional pressure following a steep decline in Asian semiconductor stocks.

South Korea’s SK Hynix fell as much as 14% in Seoul.

The decline came only one trading session after the company’s American Depositary Receipts jumped nearly 13% during their Nasdaq debut.

Monday’s reversal reflected heavy profit-taking and renewed concern about high valuations across the artificial intelligence sector.

Semiconductor Earnings Could Increase Volatility

Investors are now preparing for important second-quarter results from major chip companies.

ASML Holding and Taiwan Semiconductor Manufacturing Company are both expected to report this week.

Their earnings could provide important information about semiconductor demand, artificial intelligence spending and the wider technology outlook.

Weak guidance could place further pressure on chip stocks. Strong results, however, may help restore confidence after the latest sell-off.

Q2 Earnings Season Begins

The second-quarter earnings season will begin in earnest this week.

Investors will use the results to assess whether corporate profits can remain resilient despite higher energy prices, geopolitical instability and elevated interest rates.

The reports will also test whether current equity valuations are supported by underlying business performance.

Major U.S. Banks Report First

Several large U.S. financial institutions are scheduled to report on Tuesday.

JPMorgan Chase, Bank of America, Goldman Sachs, Wells Fargo and Citigroup will release their quarterly results.

Investors will closely examine their guidance for signs of consumer strength, credit quality and loan demand.

Bank executives may also provide insight into how households and companies are coping with high borrowing costs.

More Major Companies Report Later in the Week

The earnings calendar will become even busier during the middle of the week.

Morgan Stanley and BNY are due to report on Wednesday.

Johnson & Johnson, UnitedHealth Group, GE Aerospace and Netflix are also scheduled to release results later in the week.

These companies could offer a wider view of conditions across healthcare, industrials, finance and consumer entertainment.

Wall Street Momentum Faces a Major Test

Monday’s weakness contrasted with Friday’s positive close.

At the end of the previous session, the S&P 500 remained close to a new record high.

However, rising geopolitical risks have shifted attention back toward corporate fundamentals.

Strong earnings may be needed to support the market’s recent momentum. Weak results or cautious guidance could deepen the pressure on U.S. stocks.