Wall Street extended its losing streak to five sessions in six days on Wednesday, with the NASDAQ Composite slipping 0.57% to 25,690.90, the S&P 500 declining 0.14% to 7,498.96, and the Dow Jones Industrial Average dropping 6.06 points (0.01%) to close at 52,218.58. According to Investing.com India, the decline came as Brent crude oil advanced 1.91% to $95.87 per barrel, while West Texas Intermediate rose 1.34% to $87.99 a barrel. The latest decline follows Tuesday's recovery when the S&P 500 climbed 0.9%, the Dow Jones added 385 points (0.7%), and the Nasdaq composite rose 1.3%, despite oil prices briefly reaching near $92 per barrel. US Central Command confirmed that US forces launched additional strikes against Iranian military targets on Wednesday at the Commander in Chief's direction, with the mission continuing to degrade Iran's ability to threaten civilian mariners and commercial vessels transiting regional waters. The escalating risk of a US-Iran war was the key factor driving the dramatic structural shift in the market, with rising oil prices raising inflation concerns while directly boosting the profit outlook for energy-related sectors, prompting a rotation of capital from overextended tech stocks into the energy sector.
The semiconductor sector experienced continued volatility with SpaceX shares falling 6.7% while recently-listed SK Hynix declined 3.8%, according to Investing.com India. However, Nvidia and Super Micro Computer gained 2.3% and 19.84% respectively, with Super Micro Computer posting the strongest gains among S&P 500 companies. The semiconductor sector had previously experienced a dramatic reversal last week, with the Philadelphia Semiconductor Index falling 10% and closing in bear market territory after nearly 89% gains in the second quarter. Taiwan Semiconductor Manufacturing Company delivered a solid earnings beat but raised full-year capex guidance to a record $60-$64 billion, causing the stock to sell off despite positive results. ASML raised its full-year sales outlook for the second time in 2026 and lifted margin guidance, yet the stock finished the week lower. IBM's warning that it would miss profit estimates saw the stock sell off roughly 25% on the day of the announcement. Although the Philadelphia Semiconductor Index posted a staggering gain of over 5% on Tuesday, it immediately encountered pressure the following day, indicating that significant selling pressure persists at higher levels.
A basket of the so-called Magnificent Seven companies fell about 1%, led by declines in Meta Platforms and Microsoft, according to Investing.com India. The technology-heavy Nasdaq 100 Index fell 0.5%, after falling as much as 0.8% earlier in the session. An exchange-traded fund tracking chipmakers erased premarket losses to rise 0.44%, with Nvidia Corp. climbing 2.3%, paring earlier declines. Super Micro Computer Inc. rallied 19.84%, the most of S&P 500 companies, after the server maker issued a business update that included raising its fourth-quarter gross margins outlook and saying the backlog was at a record. Advanced Micro Devices Inc. and Anthropic PBC have agreed on a deal for AI servers worth tens of billions of dollars, with AMD shares rising 1.5% as reported by The Wall Street Journal. Mark Malek, chief investment officer at Siebert Financial, noted that "AI optimism remains intact, but the burden of proof has shifted decisively onto management teams," with future earnings calls increasingly focusing on return on invested capital rather than AI ambitions. Several major US technology companies are scheduled to report earnings later this week, with their financial results and future outlooks serving as a critical bellwether for determining whether tech stocks can sustain their strength.
Energy shares were among the best groups in the S&P 500, advancing 1.2% as oil prices jumped, after the US and Iran signaled they aren't ready to return to the negotiating table. According to Investing.com India, Brent crude traded near $95.87, up from previous levels, while West Texas Intermediate rose 1.34% to $87.99 a barrel. The price for Brent crude oil touched its highest level in nearly six weeks, and Treasury yields rose in the bond market as investors mapped escalating tensions across the Middle East. AT&T Inc. rose 3.5% after the telecom company reported second-quarter results that beat expectations on key metrics, including wireless postpaid phone net adds and adjusted earnings. GE Vernova Inc. fell 8.7% - the biggest S&P 500 decliner on Wednesday - after the power equipment manufacturer's adjusted Ebitda narrowly missed expectations, with the company still facing weakness in its wind business. Philip Morris International Inc. beat Wall Street estimates for second-quarter sales, helped by strong demand for smoke-free products, with shares rising nearly 4% after touching a fresh record.
The current market environment reflects continued pressure from rising oil prices and escalating US-Iran tensions, with Brent crude reaching $95.87 per barrel representing a significant increase from earlier levels. The S&P 500 Index fell 0.14% - its fifth loss in six days after swinging between modest gains and losses for most of the session. The technology-heavy Nasdaq 100 Index fell 0.5%, with the Philadelphia Semiconductor Index falling 10% and closing in bear market territory. The equal-weight S&P 500 outperformed the cap-weighted index last week, a pattern largely absent over the last few months as Technology was rallying. The yield on the 10-year U.S. Treasury note was up more than 3 basis points at 4.63%, the key benchmark for U.S. government borrowing, as investors mapped escalating tensions across the Middle East and reports of mediation efforts. Bank of America's July fund manager survey showed cash levels at 3.6% of assets, an "uber-low" reading, with U.S. equity positioning at its highest level since December 2024. Long global semiconductors was the most crowded trade for a third straight month, with an AI bubble now the number one tail risk cited by 45% of respondents, up from 28% in June.
