S&P 500 Falls on Chip Stocks, US-Iran Uncertainty

On May 7, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all ended lower, primarily driven by a retreat in chip stocks. Intel and AMD both declined about 3 percent, and Nubank tumbled due to supply worries for its new AI chip. This contributed to the Philadelphia Semiconductor Index dropping 2.7 percent. Adding to market uncertainty were ongoing United States-Iran peace talks, which were reportedly edging toward a temporary agreement, though renewed hostilities also broke out with the US military carrying out retaliatory strikes on Iran. Despite the downturn in some sectors, AI-focused companies like Nvidia and Microsoft climbed, and cybersecurity firms Datadog, CrowdStrike, and Palo Alto Networks also saw gains after Datadog raised its full-year earnings forecast. In contrast, Whirlpool Corporation slumped 12 percent after missing sales estimates and suspending its dividend. Economic data showed fewer-than-expected unemployment claims, and investors are awaiting nonfarm payrolls data, with expectations that the United States — Federal Reserve will hold interest rates steady.