The three major U.S. stock indices closed lower on July 7 (local time) as a sharp decline in semiconductor stocks and a surge in international oil prices weighed on the market.

The Dow Jones Industrial Average fell 130.76 points (0.25%) to close at 52,925.15.

The S&P 500 index dropped 33.58 points (0.45%) to 7,503.85, while the tech-heavy Nasdaq Composite index declined 302.47 points (1.16%) to 25,818.69.

The downturn in New York followed the previous day's decline in Samsung Electronics shares, which fell despite reporting earnings that beat expectations due to concerns over future spending and demand.

Major semiconductor stocks saw a broad sell-off, with Intel and Micron shares falling 9.7% and 4.7%, respectively. KLA, Marvell Technology, Broadcom, and AMD also posted losses.

The VanEck Semiconductor ETF (SMH), which represents the semiconductor sector, fell 3.8%.

Analysts suggest that with market expectations for tech stocks already high due to optimism surrounding artificial intelligence (AI), investors are now shifting their focus toward relatively undervalued sectors such as healthcare and finance.

Geopolitical tensions in the Middle East surrounding the Strait of Hormuz also pressured stock prices.

International oil prices surged following reports that three ships passing through the Strait of Hormuz had been attacked in succession since the previous day.

The closing prices for Brent crude for September delivery and West Texas Intermediate (WTI) crude for August delivery rose 3.01% and 2.76%, respectively, to $74.16 and $70.44 per barrel.

These represent the largest single-day gains for both since June 1.

Oil prices extended their gains in after-hours trading following news that the U.S. government would end exemptions for sanctions on Iranian oil.

Concerns that rising oil prices could fuel inflation led to a decline in U.S. Treasury prices.

The yield on the 10-year U.S. Treasury note rose 7 basis points (1bp=0.01% point) to 4.54%.

Spot gold fell 1.4% to $4,108.70 per ounce.

The U.S. dollar strengthened once again.

The Dollar Index (DXY), which reflects the value of the dollar against six major currencies, rose 0.22% from the previous day to 101.078 as of the 5:00 p.m. closing.

The won-dollar exchange rate fell 14.2 won to 1,515.80 won, while the yen-dollar exchange rate rose 0.46% to 162.076 yen.

Market concerns are emerging that the rally in semiconductor stocks may have been excessive.

Morgan Stanley assessed that the upward momentum for semiconductor stocks is weakening as investors move toward relatively laggard sectors, including hyperscalers (companies that operate large-scale data centers).

Morgan Stanley stated, "It is not sustainable for this divergence (between sectors) to continue."

Ulrike Hoffmann-Burchardi, Chief Investment Officer (CIO) at UBS, also advised that "portfolios need to be diversified."

The earnings season begins in earnest next week, starting with major U.S. banks.

Market observers suggest that if tech companies, particularly hyperscalers, fail to exceed optimistic market forecasts, it could lead to a broader correction in tech stocks.

(Photo: AP, Yonhap News)