Stocks Drop As Chipmakers Fall Again; Oil Climbs With Renewed Tensions At The Hormuz Strait
Stocks dropped on Tuesday as chipmakers tumbled again. Oil climbed following renewed tensions between the U.S. and Iran, with the former revoking a sanctions waiver following Tehran’s attacks against ships crossing through the Strait of Hormuz.
The S&P 500 dropped 0.45%, while the tech-heavy Nasdaq Composite underperformed, plummeting more than 1%. The Dow Jones Industrial Average fell 0.25% and dropped below the 53,000 mark, which hit for the first time ever on Monday.
Chipmakers like Micron, Broadcom and AMD fell during the session. The VanEck Semiconductor ETF fell more than 5%, according to CNBC.
The Trump administration revoked its temporary sanctions waiver allowing limited Iranian oil sales, ending a diplomatic concession that had been granted just weeks earlier as part of ongoing negotiations with Tehran following the renewed strikes.
The waiver, issued on June 22, had temporarily authorized the production, delivery, and sale of Iranian crude oil as the Trump administration pursued a broader peace agreement following months of conflict in the region.
The 60-day exemption was intended to encourage negotiations over Iran’s nuclear program and regional security while allowing Tehran limited access to oil revenue. However, the administration said Iran’s recent attacks on oil tankers transiting the Strait of Hormuz made the continuation of the waiver untenable.
Brent crude, the international benchmark, rose more than 5% and went back above $75 a barrel at 4:11 p.m. ET. West Texas Intermediate, the U.S. benchmark, climbed a similar amount and stood above $72 a barrel at the same time.
“Iran will only reap benefits if they exhibit good behavior. Iran’s actions in the Strait were wholly unacceptable to the United States and will be met with consequences. Our negotiators continue to work in good faith towards a final deal,” officials announced Monday, signaling a return to tougher economic pressure against Tehran.
The revocation also represents a dramatic shift from the optimism that surrounded the waiver just two weeks ago. The Trump administration had portrayed the temporary easing of sanctions as a confidence-building measure designed to facilitate negotiations between Washington and Tehran.
The waiver allowed Iran to resume limited oil exports while discussions continued over a broader agreement. It was scheduled to remain in effect until late August, giving traditional buyers, including Japan, an opportunity to explore resuming purchases of Iranian crude for the first time in years.
Reuters reported that Japanese refiners had begun preliminary discussions with Iranian officials but remained cautious because of security concerns surrounding tanker traffic through the Strait of Hormuz. Industry sources said buyers were seeking assurances about maritime safety and hoping Washington would eventually extend the waiver beyond its original expiration date. Those plans now appear effectively frozen.
