US stocks close day in red as tech shares down sharply

The New York Stock Exchange closed lower on Tuesday as a sell-off in tech shares hit stock markets.

The Dow Jones Industrial Average dropped 45.87 points, or 0.09%, to close at 51,666.84.

The S&P 500 slipped 1.44% or 107.33 points to 7,365.46, while the tech-heavy Nasdaq Composite fell sharply by 2.21% or 579.56 points to end the session at 25,587.04.

The Volatility Index (VIX), often referred to as the market’s “fear index,” jumped 12.79% to 19.49.

Concerns over the overvaluation of AI-related stocks have resurfaced following the strong rally in the markets at the start of the second quarter, which was triggered by the ceasefire in the Middle East.

A potential Fed interest rate hike and the potential reversal of AI spending financed through corporate borrowing have also contributed to rising risk aversion.

SpaceX’s announcement on Monday of its first unsecured senior bond offering also raised questions about potential pressure on AI and technology companies regarding debt and cash needs; the company’s shares, which recorded their worst daily performance yesterday with a 16% decline, rose 1% on Thursday.

Highest declines was seen in Sandisk with 13.6%.

Alphabet’s shares fell by 1%, Nvidia’s by 4%, Advanced Micro Devices’ and Intel’s by 6%, Marvell Technology’s by 9 %, and Micron Technology’s by 13%.

While developments in the Middle East are being closely monitored, US President Donald Trump emphasized that the Iranian side is fully and completely willing to accept high-level inspections of its nuclear program.

Stating that negotiations would be over if Iran did not agree to this, Trump also said based on this and other significant concessions made by Iran, the US has agreed to allow the Strait of Hormuz to remain open and to lift the naval blockade.

On the macroeconomic front, the US manufacturing Purchasing Managers’ Index (PMI) rose to 55.7 in June—its highest level in 49 months—exceeding market expectations.

The services sector PMI reached 51.3 in June—a four-month high—while the composite PMI, which covers both the manufacturing and services sectors, hit 52.2—a five-month high.

European markets

European stocks posted negative figures on Tuesday, with the pan-European Stoxx Europe 600 index fell 0.73% to close at 634.63 points.

The UK’s FTSE 100 lost 0.09% to 10,428.85, Germany’s DAX 40 dropped 0.98% to 24,893.58, and Spain's IBEX 35 went down by 0.34% to close midweek at 19,476.50.

France’s CAC 40 slipped 0.71% to 8,340.71 points and Italy’s FTSE MIB 30 fell 1.46% to 52,024.41.