US stock markets mixed as Iran war cuts S&P 5%, tech rotates

Mixed close after a volatile session

U.S. stock markets ended Tuesday with a mixed finish after recovering from steeper intraday declines, as investors weighed renewed U.S.-Iran tensions and a continued shift away from semiconductor stocks. The S&P 500 (^GSPC) fell 0.3%, while the Nasdaq Composite (^IXIC) dropped about 1% after being down as much as 3.5% earlier in the session. The Dow Jones Industrial Average (^DJI) outperformed, closing up roughly 0.2%. The moves reflected a market still trying to find direction after sharp swings linked to geopolitics, oil prices, and sector rotation.

Tuesday’s headline index moves

By the close, the gap between the Dow and tech-heavy benchmarks stood out. The Nasdaq 100 fell 1.1%, reinforcing that the day’s pressure was concentrated in large technology and chip-related names. At the same time, broader participation improved late in the session, with most shares in the S&P 500 rising even as weakness in the index’s most influential group weighed on the benchmark. The S&P 500, according to the update, nearly erased a 2.3% slide before finishing lower.

Rotation out of richly priced tech and chipmakers

A key driver highlighted in the updates was a rotation away from “richly priced” technology shares toward more economically sensitive industries. Semiconductor stocks, which had helped power a rebound from war-driven lows, were described as swinging violently. That shift mattered because tech and chipmakers have been among the most influential components for Nasdaq performance and a major weight in the S&P 500. When those names weaken, the broader market can struggle to mount a durable rebound even if many other stocks advance.

Geopolitics and oil: the Iran conflict in focus

The market tone was also shaped by escalating U.S.-Iran tensions and uncertain peace talks. Oil prices moved in response to the headlines, and one update noted that crude pared its drop after President Donald Trump said the U.S. must respond to Iran’s attack on an American helicopter. That comment dimmed hopes for a quick resolution to the conflict. Another set of updates described how inflation accelerated due to energy price pressures linked to the Iran conflict, keeping investors focused on the cost-of-living impact of higher fuel and transport costs.

How the day unfolded: from positive open to sharp sell-off

The trading day was marked by a rapid change in risk appetite. In early action, stocks opened higher, building on a tech-driven recovery that began earlier in the week. At that stage, the S&P 500 was up 0.3%, the Nasdaq led with a 0.7% rise, and the Dow climbed 0.6%. As the morning progressed, however, the tone shifted and losses deepened. Another intraday update said the Dow fell 0.3%, while the S&P 500 and Nasdaq were down 0.8% and 1.5%, respectively, despite starting in positive territory.

Intraday extremes and partial recovery into the close

At the session’s worst levels, the Nasdaq Composite was reported down over 3%, while the S&P 500 fell 2.7% amid renewed U.S.-Iran tensions and an inflationary environment. By the close, losses had moderated materially. The pattern underscored how quickly positioning can change when markets are balancing geopolitical risk with the ongoing debate over inflation dynamics, especially when oil headlines are driving energy-related price expectations.

Snapshot of index levels from live updates

Separate live updates cited point moves and index levels that illustrated the day’s shifting direction. One update showed broad weakness with the Dow down 313.15 points (0.65%) to 47,872.65 and the S&P 500 down 0.20% to 6,810.71, while the Nasdaq held a marginal gain of 0.14% at 22,855.27 after pulling back from earlier highs. Another update showed a different moment where the Dow fell 114.63 points (0.24%) to 48,071.17, while the S&P 500 rose 16.64 points (0.24%) to 6,841.30 and the Nasdaq gained 175.79 points (0.77%) to 22,998.21.

Bigger picture: losses since the start of the Iran war

The updates also framed the pullback in the context of a longer slide. Since the start of the Iran war, the S&P 500 has fallen about 5.41%, the Nasdaq has lost about 4.5%, and the Dow has dropped about 6.95%. The same coverage said all three indices posted their worst four-week loss. This backdrop helps explain why sessions can swing sharply as investors react to incremental developments on conflict risk and energy prices.

What changed on Wednesday: AI momentum cools, Hormuz headlines

A following-day update said U.S. stocks were mixed on Wednesday as momentum around artificial intelligence waned and oil prices dipped amid reports of a draft agreement involving the Strait of Hormuz. The Dow rose 0.4%, the Nasdaq dipped 0.1%, and the S&P 500 was largely unchanged after record highs on Tuesday. The U.S. government dismissed the draft-agreement claim as a “complete fabrication,” while Secretary of State Marco Rubio warned that any agreement would likely require several days to formalize. The sequence kept the focus on how quickly market narratives can pivot on conflicting headlines.

Market impact and why the rotation matters

The cross-currents described in the updates point to two dominant forces. First is geopolitics, where conflict developments affect oil prices and, by extension, inflation expectations. Second is positioning within equities, where moves out of chipmakers and other richly valued tech shares can weigh disproportionately on the Nasdaq and limit rebounds in cap-weighted indices like the S&P 500. The result, as shown in Tuesday’s session, can be a market where many stocks rise late in the day but the benchmark still struggles due to pressure in a handful of heavyweight groups.

Conclusion

Tuesday’s mixed close captured a market negotiating both geopolitical uncertainty and a sector rotation away from semiconductors and other large tech leaders. With peace-talk timelines still uncertain and energy costs tied to conflict headlines, investors continued to navigate sharp intraday swings across major U.S. indices.