U.S. markets fell after a new Strait of Hormuz blockade announcement and a hawkish signal from Federal Reserve Governor Christopher Waller pushed investors away from risk assets. The Nasdaq lost 1.55%, the Philadelphia Semiconductor Index dropped 4.78%, and Bitcoin fell more than 3%, briefly slipping below $62,000.
Major U.S. indexes closed lower
The S&P 500 fell 0.79% to 7,515.34. The Dow Jones Industrial Average lost 0.26% to 52,498.64. The Nasdaq fell 1.55% to 25,873.176 and closed below its 50-day moving average. The Nasdaq 100 dropped 1.88% to 29,264.103, while the Russell 2000 lost 0.83% to 2,953.166. The VIX rose 14.11% to 17.15.
Sector performance was uneven. The Philadelphia Semiconductor Index fell 4.78% to 12,347.784. A semiconductor ETF lost 4.16%, and a global technology equity ETF fell 2.88%. An energy sector ETF rose 3.03%.
Chip shares sold off while Apple rose
Semiconductor names were hit hard. Nvidia fell 3.52% to $203.53, Broadcom lost 3.98%, AMD dropped 4.21%, Arm fell nearly 8%, Micron lost more than 7%, and SanDisk fell more than 12%. Taiwan Semiconductor Manufacturing Co. ADR fell 2.88%.
SK Hynix’s U.S.-listed ADR dropped more than 9%. Its Seoul-listed shares plunged 15.37%, which the report described as the biggest one-day decline on record.
Among megacap tech names, Apple rose 0.71% to $316.91 and hit a record intraday high. Microsoft gained 1.53%, Amazon added 0.80%, Meta fell 1.86%, Tesla lost 3.19%, and Alphabet Class A fell 1.31%. The Magnificent Seven index declined 0.96%.
The report said capital moved out of chip and AI names and into more defensive positioning, with Apple standing out against the broader slide.
Oil climbed as gold and crypto weakened
WTI crude rose nearly 10%, reached its highest level in about a month, and moved above its 50-day moving average. Spot gold fell more than 3% at one point to $3,992.48, breaking below the $4,000 level. Spot silver was also under pressure. Bitcoin fell more than 3%, briefly dropping below $62,000, while Ether lost about 3%.
In rates and currencies, the 2-year Treasury yield rose 6 basis points to 4.28%. The 10-year real yield climbed to 2.34%, the highest level since April last year. The U.S. dollar index rose more than 0.5% from its intraday low.
Hormuz action and Waller comments drove the move
According to the report, Trump said the U.S. would restore a maritime blockade on Iran and impose a 20% transit fee on cargo shipped through the Strait of Hormuz. U.S. Central Command confirmed that the blockade operation would begin Tuesday afternoon. Commercial transit through the strait then fell to just three passages every 24 hours, the report said.
Goldman Sachs’ base case called for Brent crude to trade in a $75 to $85 range. If U.S. forces directly attack offshore energy infrastructure or several key straits are disrupted at the same time, the report said oil could move above $100.
On monetary policy, Waller said in New York that if core inflation rises again in this week’s data, the Federal Open Market Committee would consider tightening policy in the near term. He said, “No matter which metric you use, inflation has been rising this year,” and expressed concern about the path of core inflation. The report cited CME data showing the implied probability of a July rate hike had climbed to nearly 50%.
Attention shifts to Wednesday’s CPI release
The report said the move in real yields was a central source of pressure on equities. The 10-year real yield rose from 2.11% at the end of June to 2.34%, approaching the 2.40% level highlighted in the piece.
It also pointed to rising concern over the durability of the AI capital spending cycle. South Korea’s stock market fell 8.95% and was down 27% from its June high, according to the report, with the pressure spilling over into U.S. AI infrastructure and chip names.
The key variable now is Wednesday’s CPI data. If inflation accelerates again, the market’s pricing for tighter policy could rise further.