U.S. stocks fell sharply on Tuesday, with the Nasdaq Composite dropping 3% and the S&P 500 losing 1.7%, as a one-day rebound in chip stocks reversed course and optimism over a possible U.S.-Iran deal gave way to fresh uncertainty, according to CNBC.
The Dow Jones Industrial Average shed roughly 354 points, or 0.7%
Markets had opened higher as oil prices retreated and President Donald Trump told reporters on Monday that the two sides were “very close to having a good strong powerful deal” that could reopen the Strait of Hormuz, according to The Wall Street Journal. Trump later said Tuesday that the U.S. “must respond” to Iran, contributing to the reversal in stocks. West Texas Intermediate crude futures fell more than 5% to trade below $90 a barrel.
U.S. Energy Secretary Chris Wright said Strait of Hormuz ship traffic is “rising very meaningfully.” Chip stocks led the decline. After staging a 6% recovery on Monday, the iShares Semiconductor ETF reversed sharply, falling nearly 7%.