Wall Street's record-setting start to the week ran into two familiar sources of volatility: the artificial intelligence trade and oil. The Dow Jones Industrial Average on Monday closed above 53,000 for the first time ever before renewed U.S.-Iran tensions erased those gains, leaving the blue-chip index down 0.5% for the week.
Chip stocks — once the hottest corner of the market — also swung sharply as investors continued to question whether the AI trade had become overextended. Even so, the tech-heavy Nasdaq gained 1.74% for the week, while the S&P 500 rose 1.23%. Both indexes have finished higher in four of the past five weeks.
Chip stocks take investors for a wild ride
Semiconductor stocks remained at the center of the market action. The group started the week strong, with the VanEck Semiconductor ETF rising about 2% on Monday as investors bought back into some of the biggest winners from the first half of the year. But the rally quickly faded Tuesday after Samsung's results failed to impress investors.
The semiconductor trade stabilized Wednesday, helped by Apple's announcement that it was expanding its longtime partnership with Broadcom in a multiyear deal expected to exceed $30 billion.
Broadcom shares climbed nearly 5% on the news Wednesday.
Oil threatens to spoil the market rally … again
The Iran war returned to Wall Street's doorstep last week, illustrating the fragility of the interim peace agreement between Washington and Tehran. Crude prices jumped Tuesday after Iran attacked a Qatari liquefied natural gas tanker near the Strait of Hormuz.
The pressure intensified Wednesday after President Trump said the ceasefire with Iran was "over" and the U.S. military went on to strike 90 Iranian military targets.
