Wall Street ended lower on Tuesday as renewed uncertainty over a potential resolution to the Middle East conflict pressured investor sentiment. Declines in major technology stocks, including Amazon and Alphabet, contributed to losses in the broader market.
The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all closed in negative territory as investors monitored developments surrounding the Strait of Hormuz and the outlook for global energy markets.
Oil prices rise as Iran tensions continue
Iran’s Supreme National Security Council said the Strait of Hormuz would remain closed unless the United States changes its approach and accepts Iran’s conditions for ending the conflict.
Brent crude futures remained near one-week highs in volatile trading, while the S&P 500 energy sector gained 1.1% as investors priced in increased uncertainty over energy supplies.
“As has been the case for months, it’s just really hard to come to an agreement that works for everyone,” said Ross Mayfield, investment strategy analyst at Baird. “Oil is a little higher, pricing in more uncertainty around that.”
Although the conflict has affected markets, Mayfield noted that it has not created the major disruption some investors had initially feared.
Technology stocks drag indexes lower
Technology companies were among the biggest contributors to Tuesday’s decline. Amazon fell 2.1%, while Alphabet dropped 3.8%, weighing on both the S&P 500 and Nasdaq.
SpaceX shares also declined nearly 4%.
The S&P 500 dropped 0.32% to close at 7,728.20 points. The Nasdaq declined 0.6% to 26,445.45 points, while the Dow Jones Industrial Average fell 0.34% to 53,791.85 points.
AI financing partnerships boost alternative asset managers
Alternative asset managers moved higher after recently partnering with Nvidia on new AI infrastructure financing platforms.
Apollo Global Management gained 6.2%, while Blackstone rose nearly 4%. The firms are among financial institutions involved in Nvidia’s initiative to mobilize more than $500 billion for AI compute infrastructure.
Investors await inflation data and Fed signals
Market attention is now turning toward upcoming consumer and producer inflation reports, which are expected to influence expectations around the Federal Reserve’s interest rate decisions.
Investors remain divided over whether the central bank will raise rates at its September meeting, according to the CME FedWatch tool.
Rising energy prices linked to the Iran conflict have increased concerns that inflation could remain elevated, complicating monetary policy decisions worldwide.
Corporate movers: Jabil rises, On and Venture Global decline
Jabil shares climbed 5.9% after UBS upgraded the electronics manufacturer’s stock rating to “buy” from “neutral.”
Shares of sportswear company On fell 20.3% after the company missed quarterly sales expectations as consumers reduced spending.
Venture Global, an LNG company, declined 7.3% after its second-quarter revenue slightly missed analyst estimates.
Trading volume remained relatively light, with approximately 15 billion shares changing hands on U.S. exchanges compared with the 20-session average of 17.6 billion shares.
