Trump wrote in a social media post that Iran had shot down the US Apache helicopter that was patrolling the Strait of Hormuz overnight, before the US military launched retaliatory attacks that reportedly struck several Iranian air defense and radar systems around the strait.
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 percent before paring losses. The Philadelphia SE Semiconductor Index dropped as much as 8.6 percent after rising 3 percent in early trading.
The tech index ended down 1.8 percent and the semiconductor index was 1.9 percent lower on the day.
Iran and Israel had on Monday said they would stop attacking each other, momentarily boosting hopes that war tensions were easing. The blue-chip Dow ended higher, while the Russell 1000 value index gained 0.4 percent, outperforming the Russell 1000 growth index, which fell 0.7 percent.
Investors may also be worried ahead of inflation data and a highly anticipated SpaceX IPO later this week.
The Dow Jones Industrial Average rose 86 points, or 0.2 percent, to 50,872, the S&P 500 lost 19 points, or 0.3 percent, to 7,386 and the Nasdaq Composite lost 250 points, or 1 percent, to 25,678.
Consumer price data for May due on Wednesday could offer fresh clues on how the rise in energy prices, driven by the Iran war, is impacting inflation.
A stronger-than-expected jobs report on Friday increased bets that the Federal Reserve will hike interest rates this year.
SpaceX’s market debut on Friday could also be a hurdle for US stocks as investors worry about possible overexuberance among high-growth technology stocks. Elon Musk’s SpaceX is aiming to raise US$75 billion and targeting a valuation of US$1.75 trillion, the most ever for an IPO.
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.
Shares of Broadcom were down 1.1 percent on Tuesday, while Nvidia was down just 0.2 percent. Shares of Ciena fell 5.9 percent after the company announced pricing on a convertible debt offering. Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the New York Stock Exchange. (Reuters)
