Wall Street slides over 1% as tech sector cools and Iran tensions mount

The S&P 500 closed down 1.61% at 7,267.65, while the Nasdaq Composite fell 1.97% to 25,169.50. The Dow Jones Industrial Average dropped 1.87% to 49,920.07. Semiconductor giants Nvidia and Broadcom faced heavy selling as investors expressed concern over stretched valuations within the AI-driven market space. Tom Hainlin, an investment strategist at U.S. Bank Wealth Management, noted that the market is beginning to factor in higher interest rates alongside the potential for a prolonged Middle East conflict through the summer months.

Economic data released Wednesday showed consumer prices rose 4.2% over the 12 months through May, hitting the highest level since April 2023. While the increase matched consensus forecasts, it underscored the inflationary impact of rising energy costs. Beyond the broader tech retreat, Super Micro Computer shares dipped following an announcement to raise $7 billion for AI server operations. Meanwhile, trucking firms including XPO, J.B. Hunt, and Old Dominion also saw declines after Amazon expanded its freight services. As investors rotate capital into defensive sectors like healthcare and real estate, attention remains fixed on the upcoming SpaceX listing, which some analysts fear could further strain market sentiment already wary of tech-sector exuberance.