Key facts
- The S&P 500 and Nasdaq indexes fell on Tuesday as technology shares resumed their selloff.
- President Donald Trump stated the U.S. must react to Iran shooting down a U.S. helicopter, increasing doubts about a Middle East truce.
- The Cboe Volatility Index reached its highest level since April 7.
- The S&P 500 tech index fell 2.9% and the Philadelphia SE Semiconductor Index dropped 3.8%.
- The Dow Jones Industrial Average rose 0.03%, the S&P 500 lost 0.53%, and the Nasdaq Composite lost 1.21%.
U.S. stocks declined on Tuesday, with the S&P 500 and Nasdaq indexes falling as technology shares resumed their selloff. President Donald Trump's statement that Iran had shot down a U.S. helicopter over the Strait of Hormuz added to investor caution and doubts about a Middle East truce.
The Cboe Volatility Index, a measure of expected stock price swings, reached its highest level since April 7 amid the selloff.
Technology stocks, which had bounced on Monday, again faced selling pressure. The S&P 500 tech index was down 2.9%, and the Philadelphia SE Semiconductor Index dropped 3.8% after earlier trading up as much as 3%.
Michael O'Rourke, chief market strategist at JonesTrading, noted that the market saw a broader selloff after the initial bounce ran its course, attributing part of it to a momentum unwind and rotation. He added that Trump's post contributed to a further decline, though the market had already moved off its session lows.
The Dow Jones Industrial Average managed a slight gain, rising 15.98 points, or 0.03%, to 50,801.99. The S&P 500 lost 39.47 points, or 0.53%, to 7,366.26, and the Nasdaq Composite fell 314.38 points, or 1.21%, to 25,615.28.
Investors are also adopting a cautious stance ahead of key economic data, including May consumer price data due Wednesday, which could provide insights into inflation's impact from rising energy prices. Additionally, the highly anticipated SpaceX IPO later this week, targeting a $1.75 trillion valuation, is seen as a potential hurdle for U.S. stocks, with concerns about overexuberance in high-growth technology sectors.
Friday saw a sharp selloff in technology and AI-linked stocks following a disappointing forecast from Broadcom, which fueled worries about sector valuations, particularly for chipmakers that had seen significant rallies this year. Some strategists suggest investors might be booking profits in semiconductor stocks to make room for the SpaceX IPO in their portfolios.
On the New York Stock Exchange, advancers outnumbered decliners by a 1.13-to-1 ratio, with 189 new highs and 174 new lows. On the Nasdaq, decliners outnumbered advancers by a 1.08-to-1 ratio, with 2,289 stocks rising and 2,478 falling. The S&P 500 recorded 30 new 52-week highs and 8 new lows, while the Nasdaq Composite had 139 new highs and 161 new lows.