US stocks fall as oil prices surge on U.S.-Iran conflict fears; chip stocks tumble

U.S. stock markets experienced a downturn on Monday, with major indices closing lower as geopolitical tensions and a sharp rise in oil prices impacted investor sentiment. The Dow Jones Industrial Average fell 138.37 points, or 0.26%, to close at 52,498.64. The S&P 500 index declined by 0.79%, and the Nasdaq Composite saw a 1.55% drop.

The technology sector, particularly chip stocks, faced significant pressure. The Philadelphia Semiconductor Index was the hardest hit, plummeting 4.78%. Taiwan Semiconductor Manufacturing Company's (TSMC) American Depositary Receipts (ADRs) also suffered, falling 2.89% to $421.58. This decline in chip stocks follows a broader trend influenced by the artificial intelligence boom in recent months, with companies like SanDisk, Micron, Marvell, Intel, and Nvidia all experiencing notable losses.

Adding to market concerns, oil prices surged by more than 9%. This increase was attributed to President Trump's announcement of renewed blockades on Iranian vessels in the Strait of Hormuz, escalating U.S.-Iran tensions. The jump in oil prices has fueled worries about a potential long-term systemic inflation.

Investors are bracing for a volatile week ahead, with key corporate earnings reports, economic data releases, and testimony from Federal Reserve Chair Jerome Powell before Congress on the agenda. The market's reaction to these events, coupled with ongoing geopolitical developments, will likely shape trading in the coming days.