Wall Street Trims Gains as US-Iran Conflict Weighs on Sentiment
US stocks pared early gains and traded mixed on Monday (July 20th). The escalating conflict in the Middle East weighed on investor sentiment, although gains in several chipmaker stocks provided support to technology indices.
The S&P 500 and Nasdaq 100 indexes remained slightly higher, while the Dow Jones Industrial Average fell more than 200 points. Markets returned to caution after the United States and Iran resumed attacks, while the Houthi group threatened to attack Saudi Arabian commercial vessels in the Red Sea.
Long-term US Treasury bond yields also rose amid concerns that the conflict could keep fuel prices high. Rising energy costs risk amplifying inflationary pressures and strengthening the likelihood of a Federal Reserve interest rate hike this year.
Shares of Apple and Oracle fell around 3%. Morgan Stanley and Goldman Sachs also reversed, falling more than 1% after initially posting gains.
Meanwhile, chipmaker stocks gained as investors assessed the prospects for artificial intelligence infrastructure spending by major technology companies. Micron and Sandisk each rose about 5%, helping to cushion the Nasdaq's losses.
Alphabet gained about 2% ahead of the company's updated guidance on Wednesday. The guidance will be closely watched by the market to gauge the direction of capital spending on software development, data centers, and artificial intelligence chip infrastructure.
Market Impact: Escalating conflicts and rising energy prices tend to negatively impact stocks, particularly sectors sensitive to funding costs and consumption. Rising Treasury yields can support the US dollar but pressure growth stocks and gold. However, demand for safe assets due to geopolitical tensions still has the potential to support gold and short-term bonds. (yds)
Source: Newsmaker.id
