US Stocks Weaken, Chipmakers a Major Weigh
US stock indexes closed lower on Friday (June 26th), with the main pressure coming from chip stocks after investors trimmed positions following the previous rally. The S&P 500 fell slightly by 0.05%, the Nasdaq 100 fell 1.1%, while the Dow Jones Industrial Average slipped 44 points.
Semiconductor stocks were the main market drags. Micron Technology fell 6.7% after previously gaining on solid performance guidance. Pressure also spread to other major chip stocks, with Nvidia falling 1.3% and Broadcom dropping 3.7%.
This sell-off suggests investors are becoming more cautious about the valuations of technology and semiconductor stocks, especially after the strong rally previously fueled by optimism about artificial intelligence. While demand for chips for AI remains strong, the market is beginning to question whether heavy spending in this sector can continue to support profit growth.
The Dow Jones also moved more in line with technology-based indices after Alphabet replaced Verizon in the index composition. Despite its weakness, the Dow still closed near its record high, indicating that market pressure had not yet fully spread across all sectors.
Wall Street's losses were partially offset by falling oil prices. Evidence that tankers were continuing to transit the Strait of Hormuz helped improve the outlook for energy supplies from the Middle East. This condition eased concerns that the surge in oil prices would exacerbate inflation and force the Federal Reserve to raise interest rates several more times this year.
However, market sentiment remained cautious after President Donald Trump accused Iran of violating the ceasefire agreement by firing on cargo ships passing through the Strait of Hormuz. This statement emphasized that geopolitical tensions in the world's key energy region remain fragile and have the potential to re-ignite oil price volatility.
Against this backdrop, Wall Street remains caught between two major pressures. On the one hand, weakening oil prices are helping to mitigate the risk of inflation. However, on the other hand, the sell-off in chip stocks and geopolitical uncertainty are preventing investors from fully returning to aggressive risk-taking.
Source: Newsmaker.id
