Oil prices surge due to U.S.-Iran conflict...U.S. stock market 'panics' amidst semiconductor sell-off

▲ US stock market, Wall Street, semiconductors, artificial intelligence (AI), bear market/AI-generated image

The U.S. stock market fell across the board, swept by soaring oil prices and a sell-off in artificial intelligence (AI) semiconductor stocks.

According to CNBC, a U.S. economic media outlet, on July 29 (local time), the Dow Jones Industrial Average fell 825 points (1.6%) during the trading day. The S&P 500 index fell 0.9%, and the Nasdaq Composite index fell 1.2%. Caution ahead of the U.S. Federal Reserve's (Fed) benchmark interest rate decision also weighed on investor sentiment.

The resumption of hostilities between the U.S. and Iran pushed up international oil prices. Brent crude jumped 6.7% to $87.60 per barrel. West Texas Intermediate (WTI) also rose 6.3% to $84.24. Concerns about crude oil supply disruptions resurfaced as Iran launched missiles at U.S. forces stationed in the Middle East, and the U.S. and Saudi Arabia attacked pro-Iranian armed groups in Iraq.

The surge in oil prices led to concerns that inflation could strengthen again. The market reflected an approximately 36% chance that the Fed would raise the benchmark interest rate at this meeting. As caution spread that interest rate hikes could increase the burden on growth stocks and overvalued stocks, the U.S. 10-year Treasury yield rose from 4.61% to 4.64%.

The sell-off in semiconductor stocks also continued. Nvidia (NVDA) fell 2.6%, AMD fell 5.7%, and Micron Technology (MU) fell 5.3%. KLA (KLAC) fell 8.5% despite announcing earnings that exceeded market expectations. The burden of excessively high earnings expectations was reflected as the stock price had surged about 150% in the first half of this year.

The Korean stock market also could not escape the impact of the semiconductor stock shock. The KOSPI fell 6% today, following a 10.8% plunge the previous day. SK Hynix fell 9.6% as its quarterly revenue increased by 257% and recorded record-high earnings, but still fell short of market expectations. The surge in oil prices, the correction in semiconductor stocks, and the Fed's interest rate decision all coincided, expanding volatility in global stock markets.

[Key Article Summary]

-The Dow Jones index fell 825 points during the trading day, and the S&P 500 index and Nasdaq index also showed weakness.

-The resumption of hostilities between the U.S. and Iran caused Brent crude to surge 6.7%, raising concerns about inflation and interest rate hikes.

-AI semiconductor stocks such as Nvidia, AMD, and Micron plummeted, increasing downward pressure on global stock markets.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*