Wall Street indexes fall more than 1%, hit by tech, Iran war worries

[NEW YORK] The major US stock indexes ended more than 1 per cent lower on Wednesday (Jun 10), with chipmaker shares extending recent declines and with renewed tensions between the US and Iran adding to investor uncertainty.

US President Donald Trump said that the US would attack Iran again if no peace deal is secured. The threat followed one of the most significant exchanges of hostilities in two months in the Middle East war.

An index of semiconductors fell 3.6 per cent, with Nvidia and Broadcom among the biggest drags on the S&P 500. Investors have been worried about stretched valuations in the group.

The S&P 500 technology sector ended down 11 per cent from its Jun 2 record high close, confirming a correction. The Cboe Volatility Index, Wall Street’s fear gauge, added to recent gains.

Investors were still taking some profits in the tech space, said Tom Hainlin, an investment strategist at US Bank Wealth Management in Minneapolis.

Also, investors are now “pricing in maybe a higher interest rate” after recent economic data and are also worried about the war, he said.

“Perhaps that conflict continues on into the mid to late summer,” he said. Adding to the down move, shares of trucking companies XPO, JB Hunt and Old Dominion fell after Amazon announced expansion of its less-than-truckload freight services in the US Industrials dropped 3.4 per cent, leading sector decliners.

The Dow Jones Industrial Average fell 953.33 points, or 1.87 per cent, to 49,918.78, the S&P 500 lost 119.66 points, or 1.62 per cent, to 7,266.99 and the Nasdaq Composite lost 509.32 points, or 1.98 per cent, to 25,169.50.

The US Federal Reserve is widely expected to hold interest rates steady at its June policy meeting. Investors are pricing in at least one 25-basis-point rate hike by the end of the year. Friday’s US jobs report was stronger than expected.

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US stocks: Wall Street dips as tech declines, Middle East tensions mount

On Wednesday, US consumer prices increased 4.2 per cent in the 12 months through May, the largest gain since April 2023, data showed, as the Middle East conflict raised the price of petrol and other energy products.

The pace of increase was, however, in line with forecasts, as per a Reuters poll of economists. After the closing bell, Oracle shares were down about 1 per cent following the release of its results.

During the regular session, Super Micro Computer tumbled 28 per cent after it announced plans to raise US$7 billion through a series of equity and equity-linked financing transactions to fund component purchases for its growing AI server demand.

The rotation out of high-flying technology shares has helped other areas of the markets that have lagged this year, including healthcare, real estate and consumer staples. The much-hyped US$1.75 trillion listing of SpaceX on Friday, targeting a record US$75 billion raise, could also pressure US stocks as concerns mount over excessive optimism in the tech sector.

Declining issues outnumbered advancers by a 1.87-to-1 ratio on the NYSE. There were 179 new highs and 138 new lows on the NYSE.

On the Nasdaq, 1,772 stocks rose and 3,129 fell as declining issues outnumbered advancers by a 1.77-to-1 ratio.

The S&P 500 posted 22 new 52-week highs and eight new lows while the Nasdaq Composite recorded 139 new highs and 141 new lows. Volume on US exchanges was 20.7 billion shares, compared with the 20.6 billion average for the full session over the last 20 trading days. REUTERS