Wall Street Plummets as Rising Oil Prices Fuel Vicious Cycle and Semiconductor Stocks Slide

All three major U.S. stock indices closed lower across the board.

The Nasdaq dropped more than 1.3%, while the S&P 500 and the Dow also ended the session on a weak note.

By sector, technology stocks fell 2%, while industrials and materials both declined by over 1%.

International oil prices rose as the deadline for the memorandum of understanding on ending the war between the U.S. and Iran expired and follow-up negotiations stalled.

U.S. President Donald Trump drew a line against the possibility of additional talks with Iran, heightening concerns over crude oil supply disruptions, and both Brent crude and WTI surged to their highest levels since last July.

The rise in oil prices immediately stimulated the bond market.

On top of this, as the government's issuance of Treasury bonds to cover fiscal deficits steadily flowed into the market, it coincided with large-scale corporate bond issuances by major companies for artificial intelligence infrastructure investments.

As this supply burden concentrated on the bond market, the yield on the 30-year U.S. Treasury bond exceeded 5.3% during the session, soaring to its highest level in 19 years since 2007.

Growth and technology stocks, which had previously led the stock market rally, also took a heavy hit.

In particular, as the Philadelphia Semiconductor Index plummeted by more than 4%, selling pressure concentrated on semiconductor-related stocks, with Micron plunging over 7% and SK hynix ADR sliding more than 9%.

Experts analyzed that a domino effect is occurring where rising oil prices driven by geopolitical risks stimulate inflation, which in turn pushes up bond yields and weighs down the stock market.

As the FOMC minutes are scheduled to be released at 3:00 AM tomorrow in Korean time, Target's earnings report is also slated to be released before the market opens.
※ Please note: This article was translated by AI and may contain errors.