New York Stocks Close Lower as Middle East Tensions Weigh; AI Chip Shares Attempt Rebound

Dow falls 0.59%; Nasdaq slips 0.05%

Brent rises 1.27%; WTI gains 0.9%

Major U.S. stock indexes closed lower on July 20 as geopolitical tensions in the Middle East weighed on sentiment. Still, bargain buying in artificial intelligence and semiconductor shares helped keep losses limited.

The Dow Jones Industrial Average fell 307.16 points, or 0.59%, to 51,839.26.

The S&P 500 dropped 14.41 points, or 0.19%, to 7,443.28, while the tech-heavy Nasdaq Composite slipped 12.17 points, or 0.05%, to 25,508.07. The Philadelphia Semiconductor Index rebounded 0.6%.

Sentiment improved briefly early in the session on news that diplomatic contacts between the U.S. and Iran were continuing. Stocks later turned lower again as uncertainty over the Middle East resurfaced.

Geopolitical tensions intensified after Yemen's Iran-backed Houthi militants declared a maritime blockade against Saudi Arabia. President Donald Trump also wrote on Truth Social that Iran would "pay many times over."

Oil prices rose as well. Brent crude for September settlement, the international benchmark, gained 1.27% to settle at $89.22 a barrel. West Texas Intermediate crude for August delivery rose 0.90% to $83.23 a barrel.

Still, sentiment stabilized after Iran's Foreign Ministry said back-channel diplomacy with the U.S. was continuing. Bargain buying returned to AI and semiconductor shares, which had recently been hit by a sharp pullback.

Micron Technology climbed 1.94%, while AMD and Astera Labs gained 1.58% and 1.80%, respectively. Nvidia rose more than 2% intraday but gave back most of those gains to close up 0.23%.

By contrast, SK Hynix ADRs fell 1.86%.

Investors were also cautious ahead of earnings from major technology companies. Alphabet, Tesla and Intel are set to report this week, followed next week by Microsoft, Meta, Apple and Amazon.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com