S&P 500, Nasdaq fall as Trump vows response to Iran, tech rally fades – Firstpost

US stocks ended mixed on Tuesday as a rebound in technology shares lost momentum and fresh geopolitical tensions rattled investor sentiment after President Donald Trump vowed to respond to Iran’s alleged downing of a US military helicopter.

The benchmark S&P 500 slipped 0.26 per cent to close at 7,386.65, while the Nasdaq Composite fell 0.97 per cent to 25,678.82, weighed down by weakness in technology and semiconductor stocks. The Dow Jones Industrial Average bucked the trend, rising 0.17 per cent to 50,872.11.

Markets turned volatile after Trump said Iran had shot down a US Apache helicopter patrolling the Strait of Hormuz and declared that Washington would have to respond. The comments raised concerns that a fragile easing of tensions in West Asia could quickly unravel, prompting investors to move away from riskier assets.

Tech stocks resume slide

Technology shares, which had staged a recovery on Monday, came under renewed pressure. The S&P 500 technology index fell sharply during the session before trimming some losses, while the Philadelphia Semiconductor Index dropped as much as 8.6 per cent intraday before ending nearly 2 per cent lower.

The latest decline follows a broader selloff in AI-linked and semiconductor stocks that began late last week after disappointing guidance from chipmaker Broadcom sparked concerns that valuations across the sector may have run too far, too fast. Despite the recent pullback, the semiconductor index remains up nearly 79 per cent so far this year.

Shares of Broadcom fell 1.1 per cent, while AI bellwether Nvidia managed to limit losses, ending down just 0.2 per cent.

Market strategists said part of the weakness reflected investors rotating out of high-growth technology stocks after a powerful rally driven by enthusiasm around artificial intelligence.

Geopolitics add to uncertainty

Trump’s comments injected fresh uncertainty into markets that had been encouraged only a day earlier by signs that hostilities between Iran and Israel were easing. Both countries had indicated on Monday that they would halt attacks, raising hopes of a broader de-escalation in the conflict.

Those hopes were shaken after the US president’s remarks about the helicopter incident. Subsequent reports indicated that Washington had carried out strikes against Iranian targets, while Tehran threatened retaliation, raising fears of a wider confrontation in the Gulf region.

The Strait of Hormuz remains one of the world’s most important energy chokepoints, and any disruption to shipping through the waterway could have significant implications for global oil markets and inflation.

Value stocks outperform

While technology shares struggled, value-oriented sectors held up better. The Russell 1000 Value Index gained 0.4 per cent, outperforming the Russell 1000 Growth Index, which fell 0.7 per cent. The divergence highlighted a shift by investors toward more defensive areas of the market amid geopolitical and valuation concerns.

Trading volumes were significantly above recent averages, underscoring the heightened uncertainty gripping Wall Street as investors weighed the twin risks of escalating tensions in West Asia and a cooling technology rally.