US stocks: S&P 500, Nasdaq fall as tech selling resumes, Trump vows to react to downed US helicopter
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US stock markets declined as technology shares fell amid renewed concerns triggered by tensions in the Middle East after Iran shot down a US Apache helicopter. Investors are cautious ahead of upcoming inflation data and the anticipated SpaceX IPO, which could impact market dynamics.
The S&P 500 and Nasdaq indexes fell on Tuesday as a rebound in technology shares faded and as President Donald Trump said the U.S. must react to Iran's shooting down of a U.S. helicopter. Trump wrote in a social media post that Iran had shot down the U.S. Apache helicopter that was patrolling the Strait of Hormuz overnight, and vowed to respond, which added to doubts about prospects for a truce in the Middle East war. The Cboe Volatility Index hit its highest level since April 7 during the session as stocks sold off. Technology stocks resumed Friday's selloff following a bounce on Monday. The S&P 500 tech index fell more than 4% before paring losses. The Philadelphia SE Semiconductor Index dropped as much as 8.6% after rising 3% in early trading. "When the bounce ran its course this morning, the tape came for sale more broadly. There's also a rotation going on ... so part of it is more of a momentum unwind," said Michael O'Rourke, chief market strategist at JonesTrading in Stamford, Connecticut. The Russell 1000 value index outperformed the growth index.Also Read | US stocks: SpaceX IPO demand is approaching four times oversubscribed, source says Trump's post also briefly "created another leg down," O'Rourke said. In addition, investors may be worried ahead of inflation data and a highly anticipated SpaceX IPO later this week. According to preliminary data, the S&P 500 lost 20.25 points, or 0.27%, to end at 7,385.48 points, while the Nasdaq Composite lost 254.47 points, or 0.98%, to 25,675.19. The Dow Jones Industrial Average rose 84.28 points, or 0.14%, to 50,857.58. Consumer price data for May could offer fresh clues on how the rise in energy prices, driven by the Iran war, is impacting inflation. The data is due on Wednesday. SpaceX's market debut on Friday could also be a hurdle for U.S. stocks as investors worry about possible overexuberance among high-growth technology stocks. Elon Musk's SpaceX is aiming to raise $75 billion and targeting a valuation of $1.75 trillion, the most ever for an IPO. Some strategists have said investors are potentially booking profits in the high-flying semiconductor stocks to make room for SpaceX in their portfolios. Technology and AI-linked stocks sold off sharply on Friday after Broadcom's disappointing forecast fueled concerns about high valuations in the sector, particularly in chipmakers, which have rallied sharply this year. The semiconductor index remains up more than 70% for the year so far.