Wall Street Falls on Iran Tensions and Chip Sector Sell-Off

Wall Street stocks opened in the red on Wednesday, with the Dow Jones Industrial Average falling 0.67% as escalating tensions between the United States and Iran weighed on markets. The benchmark index lost 340.89 points shortly after the opening bell, reaching 50,531. The S&P 500 declined 0.59% to 7,343, and the tech-heavy Nasdaq Composite shed 0.77% to 25,481.

The market's downturn was a direct reaction to recent statements by U.S. President Donald Trump, who warned Iran about the consequences of not negotiating a deal. This followed Washington's offensive against Iranian targets in response to an attack on a U.S. military helicopter. The geopolitical escalation also boosted oil prices, with West Texas Intermediate crude rising over 1% to around $89 per barrel.

Adding to the uncertainty, semiconductor stocks continued their downward trend. Micron fell 2.17%, AMD dropped 1.03%, and Broadcom lost 3.46%. These declines extended recent losses for chipmakers, which had previously seen gains driven by the artificial intelligence boom.

Despite the overall declines, major indices pared some of their losses after May's core inflation data revealed a 0.2% monthly increase, a tenth of a percentage point below analysts' expectations. However, the year-on-year core inflation rate remained at 2.9%, still above the Federal Reserve's 2% target. Investors have recently favored selling stocks amid fears that the Federal Reserve might raise interest rates later this year due to persistent inflation and a strong labor market. Analysts also suggest that the upcoming SpaceX IPO this Friday might be prompting investors to rebalance portfolios by selling appreciated stocks to invest in the aerospace company.

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Irán ha tardado demasiado y Teherán tendrá que pagar el precio