The Dow Jones Industrial Average retreated from record highs on Tuesday as investors appeared to again be abandoning names linked to artificial intelligence and as oil prices rose.
The 30-share index lost 130.76 points, or 0.25%, after earlier hitting a new all-time intraday high. The Dow eventually closed at 52,925.15. The Nasdaq Composite fell 1.16% to 25,818.69. The S&P 500 fell 0.45% to end at 7,503.85.
Shares of Micron closed down 4.7%, with KLA, Marvell Technology, Broadcom and AMD also down. The VanEck Semiconductor ETF ( SMH ) fell more than 3%.
“Expectations have risen and fundamentals are struggling to meet these high, dizzying demands, and that’s what’s fueling today’s decline,” said Mike Bailey, director of research at FBB Capital Partners.
“I would expect the rotations we’ve seen to continue.”
Investors turned to key names in other areas of the market such as healthcare, financials and large technology companies. Shares of Eli Lilly rose nearly 3%, while JPMorgan Chase and Microsoft also posted gains. Walmart shares also rose after the company announced price cuts on products such as ground beef and Coca-Cola.
Adding to the negative sentiment, oil prices rose after Iran attacked a Qatari liquefied natural gas tanker near the Strait of Hormuz, SEEbiz reports. International benchmark Brent crude futures rose 3% to $74.16 a barrel. U.S. West Texas Intermediate crude futures rose nearly 3% to $70.44. Prices later continued to rise after the close after the US revoked a waiver authorizing the sale of Iranian oil.
Bearish pressure in AI trading began in Asia-Pacific markets, with South Korea’s Kospi falling nearly 5% following a nearly 7% drop in shares of memory chip maker Samsung Electronics. The firm reported a big jump in profits in the second quarter, although worries about spending and demand overshadowed the increase. The European Stoxx 600 index closed with a fall of around 0.7%.
