The S&P 500 fell 0.3% on Tuesday as fading hopes for a Strait of Hormuz reopening and losses in Alphabet, Nvidia and Apple weighed on the index. The Nasdaq Composite dropped 0.6% and the Dow Jones shed 82 points, while oil prices rose on renewed Iran-related uncertainty.
The S&P 500 moved lower on Tuesday, dragged down by key technology stocks, as investor hopes that the Strait of Hormuz would reopen faltered. The setback deepened lingering doubts that the U.S. and Iran can reach a broader resolution to their conflict.
Wall Street's broad market index traded down 0.3%, while the Nasdaq Composite fell 0.6%. The Dow Jones Industrial Average shed 82 points, or 0.2%.
Tech losses lead the decline
Communication services was the leading S&P 500 laggard, falling more than 1% as Alphabet and AppLovin shares dropped 3% and 5%, respectively. Alphabet shares have been under pressure recently, heading for their fourth losing session in five since Google announced it was reshuffling its artificial intelligence divisions last week.
Information technology was another sector in the red. Nvidia shares gave up their morning gain to fall marginally lower, even after the chipmaker said Monday it is partnering with six large asset managers to mobilize more than $500 billion for artificial intelligence infrastructure. Apple shares also dropped more than 1%.
Oil rises as Hormuz tensions persist
The moves came as oil prices rose amid uncertainty over the Middle East conflict, after the secretary of Iran's Supreme National Security Council reiterated that the strait would not reopen until its conditions have been met, according to Reuters. U.S. West Texas Intermediate futures were last up 1% at above $83 a barrel, while international benchmark Brent crude also gained 1% to above $88 a barrel.
Iranian Foreign Minister Abbas Araghchi had said earlier in the week that restarting negotiations was not possible as long as the U.S. continues violating the June memorandum of understanding and does not compensate Iran for those violations, according to the semi-official Tasnim News Agency. However, investors took comments from Pakistani Defense Minister Khawaja Asif as a positive signal Tuesday: in an interview with Bloomberg News, he said "things are shaping up again in favor of a peace arrangement or a deal."
Inflation data looms for the Fed
Investors will next turn to a key batch of inflation data, with the July consumer price report due Wednesday and the producer price index out Thursday. The readings could prove particularly important after a weak jobs report complicated the Fed's outlook.
Higher oil prices are renewing concerns about price pressures just as the sharp slowdown in hiring raises questions about the strength of consumer spending and the broader economy.
Source: CNBC
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