Trump Says US Will Hit Iran Harder; Nasdaq Drops 2%

Oil rises about 2%

Chip stocks including Nvidia slide

The three main U.S. stock indexes closed lower on June 10 as military tensions between the U.S. and Iran flared again.

The Dow Jones Industrial Average fell 953.33 points, or 1.87%, to 49,918.78 on the New York Stock Exchange. The S&P 500 lost 119.66 points, or 1.62%, to 7,266.99, while the Nasdaq Composite dropped 509.32 points, or 1.98%, to 25,169.50.

Investor sentiment weakened as concerns about the Middle East deepened. President Donald Trump wrote on Truth Social that the U.S. would "hit Iran harder." Iranian President Masoud Pezeshkian then signaled retaliation, heightening fears of a broader crisis.

Oil prices rose on concerns about a military clash between the two countries. Brent crude for August settlement climbed 1.80% to $93.10 a barrel, while West Texas Intermediate for July delivery gained 2.07% to $90.03.

Semiconductor and artificial intelligence stocks that had led the recent market rally also fell sharply. Nvidia lost 3.4%, and Micron Technology slid 4.7%. The Philadelphia Semiconductor Index fell 3.6%.

Super Micro Computer, the AI server maker, plunged 23.1% after announcing plans for a $7 billion stock sale to fund component purchases.

There was also analysis that investors were cutting their exposure to technology shares to raise cash ahead of SpaceX's initial public offering scheduled for June 12.

U.S. consumer price data for May, released earlier in the day, matched market expectations. The consumer price index rose 4.2% from a year earlier, the fastest pace since April 2023. Core CPI, which excludes food and energy, increased 2.9% from a year earlier and 0.2% from a month earlier, both below market forecasts.

"If Middle East tensions at current levels persist or worsen, all of the market's optimistic inflation forecasts will miss the mark," Chris Zaccarelli, chief investment officer at Northlight Asset Management, said. Higher energy prices could halt the disinflation trend, he added.

Ko Jeong-sam, Hankyung.com reporter, jsk@hankyung.com