Wall Street indexes fall more than 1%, hit by tech, Iran war worries

NEW YORK: Major US stock indexes closed more than 1% lower on Wednesday as a continued selloff in technology shares and renewed tensions between the United States and Iran weighed on investor sentiment.

The Dow Jones Industrial Average fell 953.33 points, or 1.87%, to 49,918.78. The S&P 500 declined 119.66 points, or 1.62%, to 7,266.99, while the Nasdaq Composite lost 509.32 points, or 1.98%, to 25,169.50.

Markets came under pressure after US President Donald Trump warned that the United States could launch further attacks on Iran if a peace agreement is not reached, raising concerns about an escalation in the Middle East conflict.

Technology stocks remained the main drag on the market. The Philadelphia Semiconductor Index fell 3.6%, with Nvidia and Broadcom among the largest contributors to losses in the S&P 500.

The S&P 500 technology sector ended 11% below its June 2 record closing high, confirming that the sector has entered correction territory.

Investors also reacted to signs of persistent inflation and expectations that interest rates could remain elevated for longer. Data released on Wednesday showed US consumer prices rose 4.2% in the 12 months to May, the highest annual increase since April 2023. The figure was broadly in line with market forecasts.

The Federal Reserve is widely expected to leave interest rates unchanged at its June policy meeting, although markets are pricing in at least one 25-basis-point increase by the end of the year.

Among individual stocks, Super Micro Computer plunged 28% after announcing plans to raise $7 billion through equity and equity-linked financing to support demand for its artificial intelligence servers.

Industrial stocks also came under pressure after Amazon expanded its less-than-truckload freight services in the United States. Shares of XPO, J.B. Hunt and Old Dominion declined, contributing to a 3.4% drop in the S&P industrials sector.

Investors are also watching the planned listing of SpaceX, which is seeking to raise $75 billion at a valuation of $1.75 trillion. The offering, expected later this week, has added to concerns about valuations in high-growth technology stocks.

Market breadth remained weak. On the New York Stock Exchange, declining stocks outnumbered advancers by nearly two to one, while losses also exceeded gains on the Nasdaq.

Trading volume on US exchanges totalled 20.7 billion shares, compared with the 20-day average of 20.6 billion shares.