The US stock market opened in the red on Monday as renewed tensions in the Middle East soured the investor sentiment. The chip stocks witnessed more selling pressure as investors chose profit-booking in high-valued tech stocks. The tech-heavy NASDAQ 100 index plunged over 450 points or -1.5%. The S&P 500 index opened 0.2% lower, while the Dow Jones remained largely flat.
The situation in the Middle East continues to remain grim as the US continues to strike Iran on its critical infrastructure locations. The Brent Crude oil prices surged over 5% since Monday morning to trade near $79 per barrel. While WTI crude oil prices traded 4.7% to $74 per barrel. Iran declared the Strait of Hormuz closed until further notice.
However, the US naval forces maintained that the Strait remains open. Meanwhile, Iran continued to target the US allies across the region, like Kuwait.
Renewed tensions also led to an increase in the demand for the greenback as the dollar index rose +0.1% to 101.100 level, slightly below the one-year high level of 101.851. The Treasury yields also spiked, extending Friday’s gains. The 10-Y yields rose to 4.59%.
Apart from the geopolitical cues, investors are awaiting the US CPI and PPI numbers to further gauge the Federal Reserve’s policy stance.
At the stock-specific level, the chip stocks like SanDisk Corporation (-7.4%), Intel Corporation (-4%), Micron Technology (4%), and AMD (-1.8%) were among the top losers in the NASDAQ 100 index.
Among the megacap names, Apple Inc. shares hit a fresh record high at $323 per share. Meanwhile, other megacap companies like Amazon, Meta Platforms, Microsoft and Alphabet Inc, traded mixed, hovering around gains and losses in the opening hours.
The SK Hynix ADR plunged on Monday, after a bumper opening on Friday, by soaring 13%. The company raised over $28 billion in its maiden public issue.