US Stock Market Today: Dow, S&P 500 and NASDAQ Fall as Chip Weakness and Middle East Risks Shake Markets

The US stock market moved lower on Wednesday as investors assessed renewed conflict between the United States and Iran, another decline in chip stocks, and the latest inflation data. The Dow Jones Industrial Average fell more than 400 points during morning trading, while the S&P 500 and NASDAQ Composite also declined.

The losses followed President Donald Trump’s warning that Iran had taken too long to reach an agreement with Washington. Oil prices rose after his remarks, adding pressure to markets already facing concerns about technology valuations and higher interest rates.

US Stock Market Slides After Iran Warning

The Dow Jones Industrial Average fell about 473 points, or 0.9%, during the session. Meanwhile, the S&P 500 dropped around 0.7%, while the technology-heavy NASDAQ Composite declined about 1%. Market losses eased at some points after inflation data came close to forecasts.

Trump said Iran had ‘taken too long to negotiate a deal’ and warned that the country would now ‘have to pay the price.’ His statement followed another round of military action between the two countries. US forces launched strikes against Iran after an American Apache helicopter was shot down near the Strait of Hormuz.

Oil prices moved higher as concerns about the conflict returned. West Texas Intermediate crude gained more than 1% and traded near $89 per barrel. Energy stocks rose with oil prices, making the sector one of the strongest areas within the S&P 500.

Chip Stocks Extend Their Recent Decline

Technology and semiconductor shares added pressure to the US stock market. NVIDIA, Broadcom and Micron Technology fell between 1% and 3.8%. Advanced Micro Devices also moved lower as chip stocks recorded their fourth decline in five sessions.

The iShares Semiconductor ETF had fallen about 10% on Friday before posting a small recovery on Monday. Selling resumed on Tuesday and extended into Wednesday. Despite the recent pullback, the semiconductor fund has gained more than 87% since the start of the year.

Investors have reduced exposure to some technology companies after a strong rally linked to artificial intelligence spending. Some market participants have also prepared for the expected SpaceX initial public offering on Friday. The listing aims to raise about $75 billion and could become the largest public offering on record.

Super Micro Computer shares dropped more than 14% after the company announced plans to raise $7 billion. The company plans to use the funds for component purchases linked to demand for artificial intelligence servers.

Inflation Reaches a Three-Year High

May’s Consumer Price Index rose 4.2% from a year earlier, marking the fastest annual increase since April 2023. The result matched economists’ forecasts but rose from the 3.8% annual rate recorded in April.

Consumer prices increased 0.5% from the previous month. Energy costs accounted for about 60% of the monthly rise as higher oil and gasoline prices reached consumers. Food prices increased 0.2%, while grocery prices rose 0.1%.

Core inflation, which excludes food and energy, provided some relief. Core CPI increased 0.2% in May, below the 0.3% estimate. The annual core rate stood at 2.9%, matching forecasts but staying above the Federal Reserve’s 2% target.

Art Hogan, chief market strategist at B. Riley Wealth, said the data was ‘very much in line with expectations,’ but added that inflation was ‘still moving in the wrong direction.’ Investors widely expect the Federal Reserve to keep interest rates unchanged at its June meeting. Markets are also pricing in at least one quarter-point increase before the end of 2026.

Freight Stocks Fall After Amazon Expansion

Freight and trucking stocks also declined after Amazon expanded its less-than-truckload shipping service. The company opened the service to businesses outside its own warehouse and fulfilment network.

Old Dominion Freight Line fell more than 6%, while XPO and Saia lost about 5% each. ArcBest dropped around 4%, and the newly listed FedEx Freight declined close to 3%.

The service allows Amazon to combine shipments from several customers in one trailer and deliver goods across the United States. The announcement raised competition concerns across the freight sector and pushed the S&P 500 industrials index down about 1%.

Elsewhere, foreign investors withdrew a net $26.6 billion from emerging-market bonds and stocks in May. Equity markets recorded $37 billion in withdrawals, while debt markets attracted $10.4 billion. The shift followed $70.6 billion in total inflows during April.

Also Read: US Stock Market Today: Wall Street Pulls Back From Record Highs as April CPI Fuels Fed Rate Concerns