Wall Street ended lower on Tuesday as rising oil prices and renewed uncertainty over the Strait of Hormuz weighed on investor sentiment, while weakness in major technology stocks added pressure ahead of key US inflation data due later this week.
The Dow Jones Industrial Average fell about 188 points, or 0.35%, to close at 53,787.57.
The S&P 500 declined 0.33% to 7,727.79, while the Nasdaq Composite lost 0.60% to finish at 26,445.00.
Investors turned more cautious after hopes of an imminent agreement between the United States and Iran faded, even as Pakistan suggested progress was being made toward a broader arrangement.
Markets are now focused on Wednesday’s consumer price index (CPI) report and Thursday’s producer price index (PPI), which could influence expectations for the Federal Reserve’s next policy move.
Oil gains as Hormuz uncertainty persists
Energy markets remained in focus after Iran reiterated that the Strait of Hormuz would remain closed until the United States met its conditions, dampening optimism over a near-term reopening of one of the world’s most important oil shipping routes.
Earlier in the day, Pakistan’s Defence Minister Khawaja Asif had indicated that developments were moving toward a possible peace arrangement between Washington and Tehran.
However, continued uncertainty over negotiations kept crude prices elevated.
US West Texas Intermediate crude settled 1.6% higher at $83.48 per barrel, while Brent crude rose about 1.6% to $89.2 per barrel. The rise in energy prices also lifted the S&P 500 energy sector, even as broader equity markets weakened.
Higher oil prices have renewed concerns over inflation, complicating the outlook for central banks as they balance slowing economic growth with persistent price pressures.
Technology stocks weigh on major indexes
Weakness across large-cap technology and communication services companies dragged the broader market lower.
Alphabet shares declined around 3%, extending recent losses following the company’s AI leadership restructuring. AppLovin dropped about 5%, making communication services the weakest-performing sector in the S&P 500.
Nvidia also gave up earlier gains to finish slightly lower despite announcing a partnership with six major asset managers to mobilize more than $500 billion for artificial intelligence infrastructure.
Apple shares fell more than 1%, adding to pressure on the technology sector.
Amazon also traded lower, weighing on both the Nasdaq and the S&P 500.
Outside the technology sector, alternative asset managers outperformed after partnering with Nvidia on AI financing initiatives. Apollo Global Management and Blackstone both advanced during the session.
Among individual movers, Jabil gained after UBS upgraded the electronics manufacturer to a “buy” rating.
Sportswear company On tumbled after missing quarterly sales estimates, while LNG exporter Venture Global also declined after reporting second-quarter revenue slightly below expectations.
Inflation data becomes the next market catalyst
Investor attention has shifted toward upcoming US inflation reports, with July CPI scheduled for Wednesday and producer price data due on Thursday.
The inflation readings follow last week’s weaker-than-expected jobs report, which raised concerns about slowing economic momentum while leaving the Federal Reserve with a difficult balancing act as higher oil prices continue to threaten inflation.
Markets remain divided over whether the Fed will raise interest rates at its September meeting, with traders closely monitoring incoming economic data for further clues on the policy outlook.
Although strong corporate earnings and continued optimism around artificial intelligence investments have helped keep the S&P 500 near record highs in recent weeks, geopolitical risks and energy market volatility remain key factors influencing investor sentiment.
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