Semiconductor stocks suffer their steepest pullback in months
The Dow Jones Industrial Average climbed to a record high on Tuesday, topping 52,000 for the first time, even as a broad retreat in semiconductor stocks dragged the S&P 500 and Nasdaq Composite into the red — a session defined by a sharp rotation from technology into cyclical and industrial shares.
The 30-stock Dow gained 328.64 points, or 0.64%, to close at 51,999.67, after setting an intraday record of 52,190.29. The S&P 500 fell 0.57% to 7,511.35, while the Nasdaq Composite declined 1.15% to 26,376.34, according to CNBC.
Chipmakers bore the brunt of the selling. Advanced Micro Devices dropped more than 7%, Micron Technology shed 6%, Broadcom fell 4%, and Nvidia lost more than 2%. The selloff coincided with Bank of America’s latest fund manager survey, which found that 80% of respondents identified semiconductors as the most crowded trade — the highest such reading in the survey’s history.
Iran deal lifts cyclicals, sinks oil
Fueling the rotation into economically sensitive stocks was the continued fallout from a provisional US-Iran ceasefire announced Monday. President Donald Trump confirmed the key Strait of Hormuz shipping lane would reopen Friday and later clarified that it would remain toll-free beyond an initial 60-day period.
Brent crude futures fell 5.06% to close at US$78.96 per barrel — their first settlement below US$80 since early March — while US West Texas Intermediate declined 5.82% to US$76.05 per barrel. Caterpillar rose more than 1% and JPMorgan Chase advanced more than 3%, with investors betting lower energy costs could reignite US economic growth. The State Street Industrial Sector ETF hit an all-time high, with Hubbell Inc. leading the group, up more than 7.5% for the week.
“We’re not out of the woods yet,” Andy Goldberg, chief investment strategist at Nomura Asset Management International, told CNBC. “If all of a sudden oil prices were to come down quickly, the headline inflation number will come down, but at the same time, it’ll put a lot of money back in consumers’ pockets right at a time where they’re feeling pretty good, and that’s how you can get some more inflation. [Federal Reserve chair Kevin] Warsh has a balancing act on his hands.”
SpaceX surges, acquires cursor
Space Exploration Technologies Corp. rose nearly 5% to close at US$201.80, extending gains from its record-setting Nasdaq IPO on June 12, when it priced at US$135 per share and raised approximately US$75 billion. The stock hit an intraday high of US$225.64, briefly pushing its market capitalization past Microsoft’s to rank fourth among US companies, according to TradingKey.
The company also announced Tuesday that it would acquire Anysphere, developer of AI coding agent Cursor, in an all-stock deal valued at US$60 billion, the largest acquisition of an AI developer tools company on record, according to HNGN. The transaction is expected to close in the third quarter of 2026.
Fed decision looms
Investors also positioned themselves ahead of the Federal Reserve’s first policy meeting under Warsh, set to conclude Wednesday. Markets widely expected no rate change, with 55% of Bank of America survey respondents anticipating a “hawkish hold” and 33% a “dovish hold.”
The Bureau of Labor Statistics reported that import prices rose 1.9% in May — well above the 1.1% Dow Jones consensus forecast — reaching their largest annual gain since August 2022 at 6.7%, driven largely by a 12.5% jump in fuel and lubricant prices.
Elsewhere, Robinhood Markets Inc. said it would cut roughly 10% of its workforce, booking approximately US$20 million in second-quarter severance charges, while Dave & Buster’s Entertainment plunged 14% after first-quarter earnings of 16 cents per share badly missed the 60-cent StreetAccount forecast.
