[New York Stock Market] Falls on Middle East Tensions...Semiconductor Stocks Attract Bargain Buying

The New York Stock Exchange fell due to concerns over military clashes between the United States and Iran, as well as rising international oil prices. However, hopes for a diplomatic solution remain alive, and bargain buying focused on semiconductor and artificial intelligence (AI) stocks helped limit the decline.

Reuters Yonhap News

On July 20 (local time), the Dow Jones Industrial Average (Dow) closed at 51,839.26, down 307.16 points (0.59%) from the previous trading session at the New York Stock Exchange (NYSE). The S&P 500 index, which is composed mainly of large-cap stocks, ended at 7,443.28, down 14.41 points (0.19%). The tech-heavy Nasdaq Composite closed at 25,508.07, a drop of 12.17 points (0.05%).

On this day, the New York stock market opened higher. However, as caution over the situation in the Middle East intensified, the market turned downward. As the United States and Iran exchanged airstrikes, geopolitical tensions persisted, with Iran-aligned Houthi rebels in Yemen declaring a maritime blockade against Saudi Arabia.

U.S. President Donald Trump warned on Truth Social that "Iran will pay a multiple price for every U.S. soldier it kills," signaling further retaliatory measures.

The continued instability in the Middle East pushed up international oil prices. September Brent crude futures finished at $89.22 per barrel, up 1.27% from the previous day. August West Texas Intermediate (WTI) crude futures rose 0.90% to $83.23 per barrel.

However, comments from Iran's Foreign Ministry spokesperson that behind-the-scenes diplomatic contact is ongoing helped ease market anxieties somewhat.

Semiconductor and AI-related stocks, which had recently undergone a significant correction, rebounded. Micron Technology rose 1.94%, while AMD and Astera Labs climbed 1.58% and 1.80%, respectively. However, SK hynix's American Depositary Receipt (ADR) fell 1.86%.

Louis Navellier, Chief Investment Officer at Navellier & Associates, stated, "The Iran situation continues to shake the market." He explained that, although an environment has been created in which share prices can rise on the back of robust corporate earnings, geopolitical instability is impeding a sustained market rally.

Tom Essaye, founder of the Sevens Report, also analyzed that for the market to rebound, two conditions must be met: strong earnings from major technology companies and clear signs of stabilization in the Middle East.

Investors are now turning their eyes to second quarter earnings reports from technology companies, which begin in earnest this week. Key tech firms including Tesla and Alphabet will announce their results starting on July 22. The outcome of these companies' investments in AI and their forward-looking earnings prospects are expected to play a pivotal role.

This content was produced with the assistance of AI translation services.