By Stephen Culp and Ragini Mathur
NEW YORK, July 13 (Reuters) – Tech shares pulled U.S. stocks lower on Monday after President Donald Trump announced that he would reinstate a blockade on Iranian ports in the latest escalation of U.S.-Iran hostilities that sent oil prices jumping and dampened risk appetite.
Investors stared down what promised to be an eventful week packed with earnings, economic data and congressional testimony from U.S. Federal Reserve Chair Kevin Warsh.
Among the three major U.S. stock indexes, the tech-laden Nasdaq led the losses, followed by the S&P 500. The Dow’s drop was cushioned by rising energy stocks, which were boosted by spiking crude prices due to restricted traffic through the Strait of Hormuz.
“(Stocks) really reached a high at the very end of May, driven mainly by semiconductor(s),” said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. “When you move something this far, this fast, you invite the question: how sustainable is it?
“If the market were cheap, it’d be one thing,” Martin added. “Now there’s less cushion and there continues to be a lot of unknowns.”
Amid the ongoing AI fervor of recent months, chip stocks have tended to take the lead through rally and selloff. The Philadelphia SE Semiconductor Index was the clear underperformer, with constituents SanDisk, Marvell Technology and Intel dropping between 6.1% and 12.6%.
U.S.-listed shares of South Korean chipmaker SK Hynix sank 9.3% after rising more than 12% on Friday in their Nasdaq debut.
The U.S. and Iran exchanged heavy airstrikes over the weekend, marking a sharp escalation in the scale and reach of attacks which prompted Trump to revive the U.S. blockade on Iranian ports, raising concerns about the path forward for peace negotiations. Crude prices surged, settling up 9.4%, fueling worries that strained supply and upward energy price pressures could broaden into long-term, systemic inflation.
Warsh is due to sit for his first semiannual testimony before Congress on Tuesday and Wednesday, during which the new head of the central bank will be questioned regarding the inflationary effects of the U.S.-Iran war and the Fed’s likely course of action.
Markets are pricing in at least one 25-basis-point rate hike by year-end, according to LSEG data.
To that end, the Labor Department is expected to release its consumer (CPI) and producer (PPI) price indexes this week, which will give markets and the Fed a glimpse at the extent to which the on-again-off-again U.S.-Iran war affected price growth in June.
The Commerce Department’s June retail sales data will provide insight into how well the consumer, who accounts for about 70% of the U.S. economy, is weathering the price squeeze at the gasoline pump and elsewhere.
The Dow Jones Industrial Average fell 138.31 points, or 0.26%, to 52,498.70, the S&P 500 lost 59.92 points, or 0.79%, to 7,515.47 and the Nasdaq Composite lost 408.43 points, or 1.55%, to 25,873.18.
Among the 11 major sectors of the S&P 500, tech shares suffered the biggest percentage loss, while energy led the gainers.
Major financial firms Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo were all slated to report quarterly results on Tuesday, marking the unofficial start of second-quarter earnings season.
“I wonder if the market is going to really start to revolt a little bit at the deluge of corporate issuance to fund this AI capex that has been called into question for a couple of years now,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “It’ll be interesting to see down the road how the big banks talk about corporate bonds, fixed income, and what they have on their books or not.”
Analysts currently expect aggregate second-quarter S&P 500 earnings growth of 23.7% year on year, up from the 19.2% estimates as of April 1, according to LSEG.
Declining issues outnumbered advancers by a 1.63-to-1 ratio on the NYSE. There were 152 new highs and 190 new lows on the NYSE.
On the Nasdaq, 1,592 stocks rose and 3,178 fell as declining issues outnumbered advancers by a 2-to-1 ratio.
Volume on U.S. exchanges was 15.91 billion shares, compared with the 21.83 billion average for the full session over the last 20 trading days.
(Reporting by Stephen Culp; Additional reporting by Ragini Mathur and Avinash P in Bengaluru; Editing by Mark Porter)
By Stephen Culp and Ragini Mathur | Reuters | © Copyright Thomson Reuters 2026.
