U.S. stocks came under pressure Monday after President Donald Trump said he was reinstating what he called a blockade on Iranian shipping through the Strait of Hormuz. The move pushed oil prices sharply higher and helped send the S&P 500 to session lows.
The broad market index fell 0.4%, while the Nasdaq Composite dropped 1% and the Dow Jones Industrial Average traded 56 points lower, or 0.1%. Semiconductor shares were among the weakest areas of the market as investors digested the latest escalation in the Middle East.
Trump’s Latest Escalation
In a post on Truth Social, Trump wrote that the U.S. was reinstating the “THE IRANIAN BLOCKADE” and described the country as the “GUARDIAN OF THE HORMUZ STRAIT.” He said the U.S. would be reimbursed at a rate of 20% on all cargo shipped for the costs of providing safety and security in the area.
The announcement followed a weekend of clashes between Iran and the U.S. Tehran targeted U.S. facilities in several Gulf countries and declared the Strait of Hormuz closed, though Trump said on Sunday the shipping lane remained open to commercial traffic.
Trump also ordered airstrikes on Iran on Saturday after Tehran attacked a commercial vessel transiting the strait.
Oil Jumps As Markets Reprice Risk
Oil prices surged after the announcement. U.S. West Texas Intermediate futures rose more than 5% to top $75, while Brent crude futures advanced 5.3% to $80 per barrel.
The spike in crude added another layer of concern for markets already focused on geopolitical risk and the possible effect on global shipping through one of the world’s most important energy routes.
Chip Stocks Lead The Declines
Semiconductor names were especially weak, with U.S.-listed shares of SK Hynix falling 7% after the South Korean chipmaker’s Nasdaq debut on Friday, when it had soared 13%. Micron Technology was down 6%, Sandisk shed 10%, and Seagate Technology fell 6%.
Advanced Micro Devices traded 4% lower, and Intel also moved down as investors rotated away from chip makers amid the broader risk-off tone.
| Asset | Move | Context |
|---|---|---|
| S&P 500 | -0.4% | Hit session lows after Trump’s announcement |
| Nasdaq Composite | -1% | Semiconductor weakness weighed on the index |
| Dow Jones Industrial Average | -56 points, or -0.1% | Held up better than the tech-heavy benchmarks |
| WTI futures | Up more than 5% | Moved above $75 per barrel |
| Brent crude futures | Up 5.3% | Reached $80 per barrel |
What Investors Are Watching Next
The coming week brings a heavy earnings slate, including reports from JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo. Netflix, Johnson & Johnson and UnitedHealth are also set to report.
Analysts expect second-quarter S&P 500 profits to have risen by more than 23% year over year, according to FactSet. Raymond James CIO Larry Adam said the key question in tech is whether AI can keep supporting earnings, noting that mentions of AI across all 11 sectors are up 98% year over year and have reached new highs.
The June CPI report is also due out Tuesday morning, adding another major data point for traders already navigating oil volatility, geopolitical tension and a busy earnings calendar.
