Nasdaq, Dow, S&P 500 Tumble at Open as Trump Declares Iran Ceasefire 'Over'; Oil Surges Past $78

Mumbai, July 8: US stock markets opened sharply lower on Wednesday as President Donald Trump declared the ceasefire agreement with Iran effectively “over,” triggering a global risk-off sentiment and sending crude oil prices surging past $78 per barrel. The Dow Jones Industrial Average plunged more than 500 points within minutes of the opening bell, while the tech-heavy Nasdaq Composite and S&P 500 also recorded significant losses as investors scrambled to reassess geopolitical risks that had been priced out of markets over recent weeks.

The sharp market reaction followed US military strikes on more than 80 targets in Iran after Iranian attacks on three commercial vessels in the Strait of Hormuz. President Trump’s remarks at the NATO summit, dismissing further negotiations with Tehran as a “waste of time,” further weakened hopes of a diplomatic resolution to the conflict.

Wall Street Opens Deep in Red as Geopolitical Fears Resurface

The Nasdaq Composite (^IXIC) fell 0.41% to 25,713.73 in early trading, extending losses after technology stocks had led Tuesday’s broader market decline. The index opened at 25,704.66, with trading volumes reaching 1.52 billion shares within the first hour. The day’s trading range saw the Nasdaq touch a low of 25,681.55 before recovering slightly to 25,791.19, reflecting heightened volatility as investors digested the geopolitical escalation.

The Dow Jones Industrial Average (^DJI) suffered a more severe decline, dropping 1.00% or 530.03 points to 52,395.12 at 10:03 AM EDT. The blue-chip index opened at 52,398.33 and touched an intraday low of 52,318.18, with trading volume reaching 59.79 million shares. The decline marked a significant reversal from Monday’s record close above 53,000, underscoring the fragility of investor sentiment in the face of geopolitical shocks.

The S&P 500 (^GSPC) fell 0.50% to 7,466.24, with the broad-market index opening at 7,476.54 before sliding to a low of 7,452.60. Trading volumes reached 368.44 million shares in early trading, as all three major indices recorded their second consecutive session of losses amid renewed uncertainty over the Middle East conflict and its implications for global energy supplies and inflation.

Crude Oil Surges 6% as Trump Ends Iran MoU, Threatens Further Strikes

Brent crude futures surged 6.2% to $78.73 per barrel, while West Texas Intermediate (WTI) crude gained 6.3% to trade above $74 after President Trump declared the US-Iran agreement was over. The rally marked the second straight session of gains, reversing the decline seen earlier this month when concerns over shipping through the Strait of Hormuz had eased. Speaking at the NATO summit, Trump ruled out further negotiations with Tehran and warned of additional military action.

Meanwhile, US Central Command confirmed strikes on Iranian air defence systems, command centres, coastal radar sites, anti-ship missile capabilities and Revolutionary Guard vessels. The US also revoked a licence allowing Iran to export oil globally, heightening fears of supply disruptions and tighter energy

Semiconductor Stocks Stabilise After Tuesday’s 4.7% Plunge

Chipmakers, which had been among the biggest laggards in Tuesday’s session, showed signs of stabilisation in early Wednesday trading. The Philadelphia Semiconductor Index, which had plunged 4.7% in the previous session amid concerns over AI-related spending and demand, recovered some ground as investors sought bargains following the steep decline.

Also Read: How to Invest in the US Stocks From India?

Broadcom (AVGO) jumped 4.06% following the announcement of a $30 billion multi-year chip supply deal with Apple. The agreement, which strengthens the companies’ long-standing partnership, is expected to support production of over 15 billion chips domestically and includes a $1.5 billion expansion of Broadcom’s Fort Collins, Colorado facility. The deal provided a bright spot in an otherwise gloomy tech sector, with Applied Materials (AMAT) gaining 3.15%, Lam Research (LRCX) rising 3.08%, and Arm Holdings (ARM) advancing 3.23%.

However, several prominent tech names continued to face selling pressure. Palantir Technologies (PLTR) dropped 4.51%, extending its recent decline amid concerns over valuation and slowing government contract growth. Microsoft (MSFT) fell 1.37%, Alphabet (GOOGL) declined 1.37%, and Tesla (TSLA) dropped 2.11%, contributing to the Nasdaq’s underperformance. Apple (AAPL) slipped 0.65%, while Meta Platforms (META) tumbled 1.97%.

Energy Stocks Rally as Oil Surge Boosts Sector Performance

The energy sector emerged as the day’s standout performer, with the Energy Select Sector SPDR Fund (XLE) jumping more than 2% in premarket trading as oil prices surged. Chevron (CVX) gained 1.26%, ConocoPhillips (COP) rose 0.5%, and Marathon Petroleum (MPC) advanced nearly 2% as investors priced in higher crude prices and improved profitability for producers.

Diamondback Energy (FANG) surged more than 3%, while APA Corporation and Occidental Petroleum (OXY) rose over 2.5% each. The gains reflected the direct correlation between oil prices and energy sector profitability, with analysts noting that higher crude prices typically translate into increased revenues and margins for exploration and production companies.

However, sectors sensitive to fuel costs experienced significant declines. Home Depot (HD) plunged 3.35% as consumers faced potential pressure from higher energy prices, while McDonald’s (MCD) declined 1.70%. Booking Holdings (BKNG) tumbled 3.50%, reflecting concerns over travel demand and profitability as rising fuel costs weighed on the broader travel sector. Carnival Corporation fell 3.5%, United Airlines dropped 3%, and Delta Air Lines declined nearly 2%.

Apple’s $30 Billion Broadcom Deal Fails to Lift Tech Sentiment

Despite the positive news from the Apple-Broadcom partnership, technology stocks remained under pressure. The deal, which strengthens Apple’s commitment to US-manufactured components and reduces reliance on overseas suppliers, failed to offset broader concerns about AI spending and the sustainability of the tech rally.

The agreement includes Apple’s commitment to purchase chips made in the United States, with Broadcom expanding its Fort Collins facility to meet demand. However, analysts noted that the deal’s impact on broader market sentiment was limited amid the geopolitical escalation and rising oil prices that threaten to reignite inflationary pressures.

Shares of chipmaker Intel (INTC) fell 1.13%, while Advanced Micro Devices (AMD) showed resilience, rising 0.53%. Micron Technology (MU) gained 1.39%, and Qualcomm (QCOM) advanced 1.05%, suggesting selective buying in the semiconductor space despite the broader market decline.

Fed Minutes in Focus as Rate Hike Odds Jump to 85%

Investor attention will shift to the release of the Federal Reserve’s June meeting minutes later Wednesday, which take on added significance following Chair Kevin Warsh’s first policy meeting. Traders are pricing in 85% odds of a rate hike by December, according to CME Group data, up from 80% on Tuesday, as renewed conflict in the Middle East raises concerns over inflation and energy prices.

The minutes are expected to provide insight into the Fed’s thinking after officials left interest rates unchanged while signalling that additional rate hikes could be warranted if inflation pressures persist. Former St. Louis Fed President Jim Bullard noted that the Fed rarely moves rates only once, suggesting that markets may be underestimating the potential for a tightening cycle.

“The committee does not generally do that. What’s the point of that?” Bullard told CNBC, referring to the prospect of a single rate hike. “So, usually it means a tightening cycle, and I think markets are trying to sniff that out right now.”

The Fed’s June meeting, which kept rates steady, was the first under Warsh’s leadership and marked a departure from previous communications. The central bank shortened its policy statement and refrained from providing updated interest rate projections, leaving investors to parse the minutes for clues on the policy path.

SpaceX Stock Rebounds After Falling Below IPO Price

SpaceX (SPCX) shares rebounded in premarket trading on Wednesday, rising 1.29% to $151.40 after falling nearly 7% on Tuesday below its IPO first-trade price of $150. The stock’s decline had come despite bullish analyst coverage and its inclusion in the Nasdaq-100 (^NDX), with some analysts questioning whether the company’s market valuation could be justified by its current operations.

Analysts’ average price target for SpaceX as tracked by Bloomberg stands at $236.45, representing a 58% premium to Tuesday’s close. However, the stock’s performance since its public debut has been volatile, with investors weighing the company’s long-term growth potential against near-term operational challenges.

Yahoo Finance’s Julie Hyman noted that investing in Elon Musk’s ventures often requires significant faith in the entrepreneur’s vision, with Tesla’s (TSLA) historical performance serving as a cautionary tale. Tesla sold shares to the public at $17 and started trading on June 29, 2010, hitting a low of about $1.30 a couple of months later before eventually taking off beginning in 2020.

Other Notable Stock Movers: Alibaba Rallies 10%, Lemonade Plunges 9%

Among the top gainers, Alibaba Group Holding (BABA) surged 10.66% to $108.60 following strong buying interest in Chinese tech stocks, while TeraWulf Inc. (WULF) jumped 11.12% to $22.49 and Penguin Solutions (PENG) soared 19.12% to $74.70. The gains reflected selective buying in beaten-down names, though broader market sentiment remained subdued.

Conversely, Lemonade Inc. (LMND) plunged 9.19% to $70.46, leading the list of top losers. Shift4 Payments (FOUR) fell 7.94% to $47.10, Smurfit Westrock (SW) dropped 7.40% to $41.67, and Bath & Body Works (BBWI) declined 5.99% to $19.39. Ollie’s Bargain Outlet (OLLI) fell 5.54% to $64.26, extending its recent decline amid concerns over consumer spending and retail margins.

Blue Origin Valued at $130 Billion in First Outside Funding Round

In corporate news, Jeff Bezos’ Blue Origin is raising approximately $10 billion in its first outside funding round, valuing the rocket company at $130 billion, according to sources. Bezos is set to contribute $2 billion into the round, with hedge fund Coatue Management providing about $4 billion. The remaining $4 billion has seen significant demand, with several major investors expected to participate.

The funding round represents a major milestone for Blue Origin, which has historically been funded primarily by Bezos’ personal wealth. The valuation places Blue Origin among the most valuable private companies in the world, reflecting growing investor appetite for space-related ventures as commercial space exploration continues to gain momentum.

Bond Yields Rise as Rate Hike Expectations Firm Ahead of Fed Minutes

The global bond sell-off continued as investors positioned for higher interest rates in response to rising oil prices and inflation concerns. US 10-year Treasury yields rose to 4.577%, while UK Gilts and European sovereign bonds also recorded significant increases.

The Federal Reserve’s June meeting minutes, due at 2 PM ET, are expected to provide additional colour on policymakers’ thinking after Warsh’s first meeting as chair. The minutes take on added significance given the recent geopolitical developments and their potential impact on inflation and economic growth.

Traders are pricing in 75% odds of a rate hike by the Fed’s October meeting, up from 70% on Tuesday, according to CME data. The odds of a December rate hike now stand at 85%, suggesting growing conviction among investors that the Fed will need to deliver at least one rate increase this year to combat persistent inflation.

The escalation in US-Iran hostilities and the resulting surge in oil prices above $78 per barrel introduce renewed uncertainty into equity markets that had grown complacent about geopolitical risks. The Federal Reserve’s June meeting minutes will be scrutinised for clues on the policy path, particularly given Chairman Kevin Warsh’s first meeting and the absence of updated rate projections. Rising bond yields across global markets reflect growing concerns that energy-driven inflation could force central banks to maintain or tighten monetary policy. Energy stocks have benefited from higher crude prices, while consumer discretionary and travel-related shares face headwinds from rising fuel costs.

Source

• https://www.nasdaq.com/

• spglobal.com/spdji/en/indices/equity/sp-500/

• https://www.dowjones.com/