S&P 500, Nasdaq fall as tech selling resumes, Trump vows to respond to downed US helicopter

NEW YORK: US stocks ended mixed on Tuesday as renewed selling in technology shares, rising geopolitical tensions in the Middle East and investor caution ahead of key economic data weighed on market sentiment.

The Nasdaq Composite fell 250.84 points, or 0.97%, to close at 25,678.82, while the S&P 500 lost 19.08 points, or 0.26%, to 7,386.65. The Dow Jones Industrial Average bucked the trend, gaining 86.10 points, or 0.17%, to finish at 50,872.11.

Markets came under pressure after President Donald Trump said on social media that Iran had shot down a US Apache helicopter patrolling the Strait of Hormuz overnight and vowed that Washington would respond. The comments added to concerns about the durability of a potential truce in the Middle East conflict after Iran and Israel indicated a willingness on Monday to halt attacks.

The Cboe Volatility Index (VIX), often regarded as Wall Street's fear gauge, climbed to its highest level since April 7 during the session as investors moved away from riskier assets.

Technology stocks resumed their decline after a brief rebound on Monday. The S&P 500 technology index fell more than 4% at one stage before recovering some losses to close down 1.8%. The Philadelphia Semiconductor Index also swung sharply, dropping as much as 8.6% intraday before ending 1.9% lower.

Michael O’Rourke, chief market strategist at JonesTrading, said the recovery in technology stocks had lost momentum, triggering broader selling across the market. He added that Trump's comments on Iran contributed to the decline.

The weakness in growth stocks contrasted with stronger performance in value-oriented shares. The Russell 1000 Value Index rose 0.4%, outperforming the Russell 1000 Growth Index, which fell 0.7%.

Investors are also preparing for the release of May consumer price data on Wednesday, which could provide insight into how higher energy prices linked to the Iran conflict are affecting inflation.

The inflation report follows a stronger-than-expected US jobs report released on Friday, which increased expectations that the Federal Reserve could raise interest rates later this year.

Attention is also turning to SpaceX's highly anticipated stock market debut on Friday. The Elon Musk-led company is seeking to raise $75 billion at a valuation of $1.75 trillion, which would make it the largest initial public offering on record.

Market participants are closely watching the listing amid concerns that enthusiasm surrounding artificial intelligence and high-growth technology companies may have pushed valuations to elevated levels.

The recent pressure on technology shares began after Broadcom issued a forecast that disappointed investors, raising concerns about valuations across the semiconductor sector. Despite recent declines, the Philadelphia Semiconductor Index remains up 78.7% so far this year.

Broadcom shares fell 1.1% on Tuesday, while Nvidia slipped 0.2%. Networking equipment maker Ciena dropped 5.9% after announcing the pricing of a convertible debt offering.

Market breadth remained relatively positive. On the New York Stock Exchange, advancing stocks outnumbered decliners by a ratio of 1.33-to-1, while on the Nasdaq, gainers held a slight edge over losers.

Trading activity was elevated, with 24.77 billion shares changing hands across US exchanges, compared with an average of around 20 billion shares over the previous 20 trading sessions.