Middle East Tensions, AI Chip Selloff Drag Down US Stocks; Brent Surges 9.6%

Brent surges 9.6%; WTI jumps 9.4%

SK Hynix ADR drops 9.32% as chip shares slide

Major U.S. stock indexes closed lower on July 13 as escalating geopolitical tensions in the Middle East and weakness in artificial intelligence chip shares weighed on sentiment. Oil prices soared after President Donald Trump announced plans to resume a maritime blockade against Iran and impose transit fees on ships passing through the Strait of Hormuz.

The Dow Jones Industrial Average fell 138.37 points, or 0.26%, to 52,498.64 at the New York Stock Exchange.

The S&P 500 dropped 60.05 points, or 0.79%, to 7,515.34, while the tech-heavy Nasdaq Composite slid 408.43 points, or 1.55%, to 25,873.18.

Markets reacted sharply to the worsening situation in the Middle East. With military tensions between the U.S. and Iran rising again, Trump said he would reinstate a maritime blockade on vessels traveling to and from Iranian ports and coastal areas. He also unveiled a plan to charge civilian ships passing through the Strait of Hormuz a security transit fee equal to 20% of their cargo.

Oil prices jumped as concerns over supply disruptions intensified. Brent crude for September settlement, the international benchmark, rose 9.6% to settle at $83.30 a barrel. U.S. West Texas Intermediate crude futures climbed 9.4% to close at $78.14 a barrel.

Hawkish comments from a Federal Reserve official also added pressure. Governor Christopher Waller said a short-term interest-rate increase may be needed if core inflation continues to rise. Markets are also watching the June consumer price index due July 14 and congressional testimony from Fed Chair Kevin Warsh.

Technology shares remained under pressure. Profit-taking in AI chip stocks sent SK Hynix American depositary receipts down 9.32%. The drop wiped out most of the 13.1% gain from July 10, its first day of trading on Nasdaq.

Micron fell 4.32%, Sandisk dropped 12.63%, and Seagate lost 5.46%. AMD and Intel also fell in the 4% and 6% range, respectively, leading a broader decline in semiconductor shares.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com