U.S. stock market today fell sharply on July 7, 2026, as investors rotated away from artificial intelligence stocks amid mounting concerns about spending on AI infrastructure, while oil prices surged following Iranian attacks on tankers near the Strait of Hormuz.
The S&P 500 slid 0.45% to end at 7,503.85, while the Nasdaq Composite fell 1.16% to 25,818.69 and the Dow Jones Industrial Average dipped 0.25% to 52,925.15, according to CNBC. The broad retreat marked a sharp reversal from Monday’s gains, when the Nasdaq had climbed 1.12%.
Chip stocks led the decline. The VanEck Semiconductor ETF fell more than 3%, with individual chipmakers suffering steeper losses: Micron closed down 4.7%, while Marvell Technology, Broadcom, and AMD also posted significant declines. The selloff rippled globally, with South Korea’s Kospi dropping nearly 5% after Samsung Electronics fell more than 9% despite forecasting record second-quarter profit of 89.4 trillion won.
The chip sector’s weakness stemmed from investor anxiety over whether massive artificial intelligence investments will justify lofty valuations. Mike Bailey, director of research at FBB Capital Partners, told CNBC: “Expectations are up, and fundamentals are struggling to meet these high sky-high demands, and that’s what’s fueling today’s decline.” Samsung’s record earnings failed to ease concerns, as investors remained focused on the company’s spending outlook and demand risks in the memory chip market.
Adding to the downbeat sentiment, Reuters reported that Chinese AI startup DeepSeek is developing its own AI chip, a move that could reduce its dependence on semiconductors from companies like Nvidia and Samsung. The development heightened fears of oversupply in the chip sector and further pressured valuations.
Oil prices surged after Iran attacked a Qatari liquefied natural gas tanker near the Strait of Hormuz, a strategically vital waterway that typically handles around 20% of the world’s oil traffic. Brent crude futures settled up 3% at $74.16 per barrel, while U.S. West Texas Intermediate futures gained almost 3% to $70.44. Prices extended gains later in the session after a U.S. official told CNBC that the Treasury Department is revoking the license that permits Iranian oil sales, with Brent crude rising more than 5% to above $76 a barrel and WTI adding more than 5% to above $72 a barrel by late trading.
The tanker attack and subsequent U.S. policy shift raised tensions around the interim peace agreement between the U.S. and Iran, which had been signed on June 17. The Joint Maritime Information Center warned merchant vessels that “deliberate hostile action” by Iran is “likely under current conditions,” increasing the threat level for ships crossing Hormuz to “severe.”
Despite the broad market weakness, some sectors found support. Eli Lilly gained almost 3%, JPMorgan Chase and Microsoft saw gains, and Walmart shares rose following the company’s announcement of price cuts on products including ground beef and Coca-Cola.
Sources
- CNBC — Stock market closing data, chip stock declines, oil price movements, and analyst commentary from Mike Bailey on AI spending concerns
- Reuters — DeepSeek’s development of its own AI chip and chip sector implications
