AI Chip Pullback, Oil Plunge as US-Iran Report Sways Stocks

US stocks traded marginally lower as investors booked gains in high‑beta AI chip names and oil prices plunged after reports of a US‑Iran framework covering Strait of Hormuz shipping. The S&P 500 slipped 0.07% to 7,513.54 while the Dow rose to a record 50,668.5. The Nasdaq inched down.

Semiconductor and AI infrastructure names led the weakness. Nvidia fell 1.9%, Advanced Micro Devices lost 1.7% and Intel declined 3.4%. Qualcomm dropped 7.8% after recent strong gains cooled. Broader cyclical and consumer sectors gained as energy costs fell.

Oil prices fell sharply after reports said a memorandum would restore commercial transit through the Strait of Hormuz to pre‑war levels within 30 days and involve U.S. forces withdrawing from Iranian waters. West Texas Intermediate crude declined 5.7% to $88.53 a barrel and Brent fell 4.7% to $94.91. The Energy sector declined 1.17% on the session.

Political reactions to the reported framework were mixed. Former President Donald Trump posted “NO AGREEMENT” and the White House dismissed the report as “completely fabricated,” creating uncertainty about the terms and credibility of the draft memorandum.

Consumer cyclical stocks led gains, rising 1.28%, with Tesla up 1.9% and Amazon up 1.6%. Consumer defensive names also strengthened; Pepsi advanced 1.9% as investors rotated into lower‑volatility sectors ahead of key economic data.

Earnings and corporate news added market pressure on some technology names. Zscaler shares fell more than 30% after the company issued weaker revenue guidance. Marvell Technology, Salesforce and Snowflake were scheduled to report after the bell, and Dell Technologies is set to report Thursday evening, with analysts watching AI server demand.

Micron stood out in the chip group after receiving an analyst upgrade and a higher price target tied to a tighter memory supply‑demand outlook. Market breadth was mixed: advancers slightly outnumbered decliners and about half of S&P 500 components remained above their 200‑day moving averages.

Investors positioned ahead of Thursday’s Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation gauge, due at 8:30 a.m. ET alongside the second estimate of first‑quarter GDP and weekly initial jobless claims. The market consensus expected April headline PCE near 3.6% year‑over‑year and core PCE near 3.3% year‑over‑year. Core PCE typically tracks energy with roughly a two‑month lag, so April readings will partly reflect March oil movements.

Technically, the S&P 500 remained above its 20‑day exponential moving average, with short‑term support cited near 7,445 and resistance around 7,626. Traders trimmed positions in the most volatile names while awaiting the inflation data and the next round of corporate results.