Wall Street's major indexes closed sharply lower on Wednesday (Thursday AEST), with technology stocks leading broad-based declines as investors weighed renewed geopolitical tensions in the Middle East and signs of persistent inflation in the United States.
The Dow Jones Industrial Average fell 953.3 points, or 1.9%, to 49,918.8. The S&P 500 dropped 119.7 points, or 1.6%, to 7,267.0, while the Nasdaq Composite declined 509.3 points, or 2.0%, to 25,169.5.
Investor sentiment deteriorated after President Donald Trump warned the United States could launch further strikes against Iran if a peace agreement is not reached.
The comments followed one of the most significant escalations in hostilities between the two countries in the past two months, increasing uncertainty across global financial markets.
Technology shares remained under pressure, extending a recent sell-off that has seen investors rotate away from some of the market's strongest performers.
The semiconductor index fell 3.6%, with chipmakers among the biggest drags on the broader market.
Nvidia dropped 5.2%, while Broadcom lost 3.7%.NVIDIA
The weakness pushed the S&P 500 information technology sector 11% below its record closing high reached on June 2, confirming a technical correction within the sector.
Market volatility also increased, with the Cboe Volatility Index (VIX), commonly referred to as Wall Street's fear gauge, extending its recent gains.
Industrials were the weakest-performing sector, falling 3.4%. Transportation stocks came under pressure after Amazon announced an expansion of its less-than-truckload freight operations in the United States.
Shares of XPO declined 5.0%, J.B. Hunt Transport Services fell 2.2%, and Old Dominion Freight Line dropped 5.1%.
Economic data released during the session showed consumer prices in the United States rose 4.2% in the 12 months to May, marking the largest annual increase since April 2023.
Higher energy costs linked to the Middle East conflict contributed to the increase, although the reading was broadly in line with market expectations.
Following the close, Oracle shares slipped around 1% after the software company released its latest financial results.
Among individual stocks, Super Micro Computer plunged 28% after announcing plans to raise US$7 billion through a combination of equity and equity-linked financing transactions.
The company said the proceeds would be used to secure components needed to support growing demand for its artificial intelligence server products.
Market participants are also closely watching the planned $1.75 trillion SpaceX listing scheduled for Friday. The offering is expected to raise a record $75 billion and has fuelled debate over valuations and investor enthusiasm surrounding technology-related assets.
In bond markets, U.S. Treasury yields moved higher. The benchmark 10-year Treasury yield rose 0.8% to 4.554%, while the two-year Treasury yield increased 0.6% to 4.145%.
