Wall Street stocks closed lower on Tuesday for a second consecutive day after falling expectations for an immediate reopening of the Strait of Hormuz renewed geopolitical risks. Higher oil prices also heightened inflation concerns and raised questions about future actions by the Federal Reserve.
Technology shares faced heavy selling pressure, pulling the Nasdaq down further as investors prepared for U.S. inflation figures scheduled for Wednesday. The Dow Jones Industrial Average dropped 0.34 percent to 53,791 points, while the Nasdaq tech index fell 0.6 percent to 26,445 points. The S&P 500 recorded a loss of 0.32 percent to close at 7,728 points.
Technology Stock Losses
Communication services performed worst among S&P 500 sectors, losing more than 1 percent. Alphabet fell roughly 3 percent, heading toward its fourth decline in five sessions after Google moved to restructure its artificial intelligence units. AppLovin dropped 5 percent, while Apple lost more than 1 percent.
Nvidia surrendered early gains to finish slightly lower despite announcing a partnership with six major fund managers to mobilize more than $500 billion for artificial intelligence infrastructure.
Energy Markets and Inflation Data
In energy trading, U.S. WTI crude rose 1.3 percent to $83.20 per barrel, and Brent crude gained about 1.4 percent to $88.91 per barrel. The gains came as Iran repeated that the Strait of Hormuz would stay closed until Tehran's conditions were satisfied. However, Pakistan Defence Minister Khawaja Asif provided some optimism, stating that progress was moving back toward a peace deal or agreement.
Market attention now turns to July consumer price data on Wednesday and the producer price index on Thursday. The reports follow weak labor market data that complicated the outlook for the Federal Reserve. Higher energy costs add potential inflation risks while slowing hiring creates concern about consumer demand and economic resilience. Dennis Vollmer, chief investment officer at Montis Financial, estimated that consumer inflation would continue falling, supporting keeping Federal Reserve interest rates at current levels rather than raising them.
