Key facts
- U.S. stocks declined on July 13 following President Donald Trump's decision to reinstate a blockade on Iranian ports.
- The geopolitical escalation sent crude oil prices surging by 9.4%.
- Technology shares, particularly semiconductors, led the market lower, while energy stocks rose.
- Investors are looking ahead to key economic data and corporate earnings reports this week.
- Federal Reserve Chair Kevin Warsh is scheduled to testify before Congress.
U.S. stocks retreated on July 13, with technology shares leading the decline, as President Donald Trump announced the reinstatement of a blockade on Iranian ports. This move escalated tensions between the U.S. and Iran, causing oil prices to surge and diminishing investor confidence.
The Nasdaq Composite was the biggest loser, falling 1.55%, followed by the S&P 500, which dropped 0.79%. The Dow Jones Industrial Average saw a smaller decline of 0.26%, buoyed by gains in energy stocks. The surge in crude prices, driven by concerns over traffic through the Strait of Hormuz, fueled worries about potential long-term inflation.
Analysts noted that the market's recent rally, particularly in semiconductors, invited questions about sustainability. Chip stocks were significant underperformers, with constituents like SanDisk, Marvell Technology, and Intel dropping between 6.1% and 12.6%. U.S.-listed shares of South Korean chipmaker SK Hynix also fell sharply.
Investors are bracing for a busy week featuring corporate earnings reports, economic data, and testimony from Federal Reserve Chair Kevin Warsh. The market is pricing in a potential interest rate hike by year-end. Key economic indicators, including consumer and producer price indexes and retail sales data, will provide insights into inflation and consumer spending.