New York, July 8, 2026, 16:02 (EDT)
- Dow drops 577.18 points, or 1.09%, to close at 52,347.97
- S&P 500 down 0.28%; Nasdaq up 0.20% as chip stocks hold steady
- Blue-chips and cyclicals stayed under pressure as oil jumped and traders weighed Fed rate risks
Dow Jones dropped over 500 points Wednesday as rising U.S.-Iran tensions sent oil prices up and put sticky inflation worries back in play. The index fell 577.18 points, or 1.09%, to end at 52,347.97, snapping part of its recent surge. The S&P 500 slipped 0.28%. Nasdaq Composite edged up 0.20%.
The split showed up in trading. The Dow, which is price-weighted and gives heavier names more sway, took a bigger hit than the rest of the market as industrials, materials and other cyclical stocks fell. The Nasdaq did better, helped by a bounce in some chip and AI plays.
Brent crude jumped 5% after President Donald Trump declared the interim deal with Iran “over” at a NATO summit in Turkey, Reuters said. Trump told reporters he wasn’t looking for more talks and signaled more U.S. strikes could be coming. Treasury yields moved up as traders looked for more inflation risk. Reuters
“Duration is the key here. How long does this go on?” Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle, told Reuters. He said markets might react more strongly if Iranian infrastructure is hit and there’s retaliation. Reuters
Losses hit some S&P 500 sectors harder than others, with industrials and materials out in front on the downside. Travel stocks also took a hit as higher crude prices raised the specter of pricier fuel. United Airlines sank 2.3%, Delta was off 1.9%, Carnival fell 3.7%, and Norwegian Cruise Line gave up 2.1%, according to Reuters.
Tech helped steady the market. Broadcom gained after Apple said it will spend over $30 billion as part of a new multi-year chip deal with Broadcom. Apple said the agreement, which goes to 2031, includes radio-frequency chips for wireless functions in Apple devices. Broadcom will put $1.5 billion toward growing its Fort Collins, Colorado, facility as part of the deal.
“Any time you get an announcement from Apple about using your equipment, it’s pretty positive,” B. Riley Wealth’s Art Hogan told Reuters, citing Apple’s huge base of devices. Nvidia moved higher after reports said China will allow some buying of its H200 AI chips, lifting the PHLX semiconductor index by 2.2%. Reuters
The Federal Reserve stayed cautious, according to minutes from the June 16-17 meeting. Worries over inflation grew, with several officials considering an immediate rate hike. Nine out of 18 policymakers projected a slight increase in rates by the end of the year. The Fed left its policy rate unchanged at 3.50%-3.75%.
The rate risk is clear here. If oil prices keep running high, it could make inflation harder to bring down. Stocks usually take a hit from higher rates, since they push up borrowing costs and cut into the present value of future earnings.
The catch is Wednesday’s late selloff didn’t reach the lows traders feared in the afternoon. If the Iran headlines die down and oil prices drop, buyers could move back into the AI and earnings stories that’ve propped up stocks. If the conflict grows, the Dow could keep dropping, with higher energy prices, rising yields and changing Fed bets all pushing on risk assets at once.
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