Wall Street experienced a downturn as major tech stocks slid, overshadowing positive developments in peace talks between the US and Iran. The Nasdaq Composite fell by 1.3%, driven by a significant 16% plunge in SpaceX shares, which reached their lowest point since their initial trading day. Alphabet Inc. also saw a decline, contributing to losses in megacaps, while rising Treasury yields further dampened market sentiment. Brent crude settled under $78 a barrel, reflecting the easing geopolitical tensions.
Optimism stemmed from progress in US-Iran talks, which included a 60-day license allowing Iran to sell oil internationally and an agreement for nuclear inspectors to return to the country, as stated by Vice President JD Vance. These developments had previously fueled a nearly 20% surge in the US equity benchmark since war-driven lows, alongside the revival of the AI trade and strong corporate earnings.
The tech sector's struggles were highlighted by a 5% drop in Alphabet after Google DeepMind Vice President John Jumper, a Nobel laureate in chemistry for his AI work, announced his departure to join Anthropic PBC. SpaceX's decline comes as the company plans a massive borrowing spree through investment-grade bonds to fund its artificial intelligence ambitions. However, other AI-related companies saw gains: Micron Technology Inc. climbed after a strategic agreement with Anthropic, and Getty Images Holdings Inc. soared following a licensing deal with OpenAI.
Overall, the S&P 500 fell 0.4%, the Nasdaq 100 dropped 0.2%, and the MSCI World Index declined 0.2%. The Dow Jones Industrial Average, however, rose 0.3%. In the commodities market, West Texas Intermediate crude fell 2.2% to $74.21 a barrel, while spot gold rose 0.9% to $4,192.94 an ounce. The yield on 10-year Treasuries advanced five basis points to 4.51%.
