Wall Street Weakens, Chip Stocks Resuming Pressure on Indexes
US stocks weakened on Tuesday (May 19), dragged down by continued selling in semiconductor stocks, which have been driving the AI-themed rally. The market was also monitoring oil prices after President Donald Trump canceled plans to attack Iran, as well as bond yields that remained near multi-year levels and risked depressing consumer purchasing power.
In Tuesday's trading, the S&P 500 fell 0.5% and the Nasdaq Composite fell 0.6%, with both heading for their third straight day of declines. The Dow Jones Industrial Average fell 357 points, or 0.7%.
The biggest pressure came from the chip sector. The Philadelphia Semiconductor Index fell 0.6%, recording a two-day decline of more than 6% amid profit-taking and concerns about valuations and the sustainability of aggressive data center spending. Nvidia fell slightly ahead of its fiscal first-quarter earnings release on Wednesday after the market close, while Qualcomm fell more than 3% and Broadcom fell 1.8%.
Oil prices weakened on Tuesday after Trump said Monday night that he was holding off on plans to attack Iran after three Middle Eastern leaders urged him to "hold off." WTI fell 0.4% to US$103.81 per barrel, while Brent fell 1% to US$110.96. Trump's remarks helped the S&P 500 and Nasdaq pare losses at the end of Monday's session, although both closed lower for a second straight day.
This correction follows a strong rally in recent weeks, with the S&P 500 and Nasdaq hitting new records last week and the Dow briefly returning to the 50,000 level. However, Kevin Gordon of the Schwab Center for Financial Research believes the market rally may have passed its peak, as investors are now more sensitive to the combination of high yields, still-elevated energy prices, and technology stock valuations. (arl)
Source: Newsmaker.id
