S&P 500, Nasdaq fall as tech selloff resumes, Trump says US must react to downed US helicopter
By Caroline Valetkevitch and Twesha Dikshit
June 9 (Reuters) – The S&P 500 and the Nasdaq indexes fell on Tuesday as a rebound in technology shares faded and as President Donald Trump said the U.S. must react to Iran’s shooting down of a U.S. helicopter.
Trump wrote in a social media post that Iran had shot down the U.S. Apache helicopter that was patrolling the Strait of Hormuz overnight, and vowed to respond, which added to doubts about prospects for a truce in the Middle East war.
The Cboe Volatility Index hit its highest level since April 7 as stocks sold off.
Technology stocks resumed their selloff from Friday following a bounce on Monday. The S&P 500 tech index fell more than 4% and was last down 2.9%. The Philadelphia SE Semiconductor Index also dropped sharply after rising as much as 3% in early trading. It was last down 3.8%.
“When the bounce ran its course this morning, the tape came for sale more broadly. There’s also a rotation going on … so part of it is more of a momentum unwind,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
Trump’s post “created another leg down,” he said, but added that the market is already off its lows of the session.
The Dow Jones Industrial Average rose 15.98 points, or 0.03%, to 50,801.99, the S&P 500 lost 39.47 points, or 0.53%, to 7,366.26 and the Nasdaq Composite lost 314.38 points, or 1.21%, to 25,615.28.
Investors also appear to be turning cautious ahead of inflation data and a highly anticipated SpaceX IPO later this week.
Consumer price data for May could offer fresh clues on how the rise in energy prices, driven by the Iran war, is impacting inflation. The data is due on Wednesday.
SpaceX’s market debut on Friday could also be a hurdle for U.S. stocks as investors worry about possible overexuberance among high-growth technology stocks. Elon Musk’s SpaceX is aiming to raise $75 billion and targeting a valuation of $1.75 trillion, the most ever for an IPO.
Some strategists have said investors are potentially booking profits in the high-flying semiconductor stocks to make room for SpaceX in their portfolios.
Technology and AI-linked stocks sold off sharply on Friday after Broadcom’s disappointing forecast fueled concerns about high valuations in the sector, particularly in chipmakers, which have rallied strongly this year.
Advancing issues outnumbered decliners by a 1.13-to-1 ratio on the New York Stock Exchange. There were 189 new highs and 174 new lows on the NYSE.
On the Nasdaq, 2,289 stocks rose and 2,478 fell as declining issues outnumbered advancers by a 1.08-to-1 ratio. The S&P 500 posted 30 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 139 new highs and 161 new lows.
(Reporting by Caroline Valetkevitch in New York and Twesha Dikshit in Bengaluru; Additional reporting by Joel Jose and Sruthi Shankar in Bengaluru; Editing by Shinjini Ganguli and Matthew Lewis)
