〈After US Markets〉US-Iran 60-Day Negotiation Deadline Arrives! Oil and Bond Yields Pressure Markets, Nasdaq Falls, SOX Index Surges Against Trend

The US-Iran Memorandum of Understanding, signed in June, expired on Monday (17th) after 60 days with no agreement reached on ceasefire, Iran's nuclear program, or the Strait of Hormuz. President Trump stated there is no sign of a quick end to the conflict and warned Oman that the US military would launch a fierce bombing if it 'interfered' in Hormuz negotiations.

These remarks reignited concerns over escalating Middle East tensions. Brent crude futures surged past $90 per barrel, with both Brent and West Texas Intermediate (WTI) crude rising over 2%. Rising oil prices revived market fears that higher energy costs could fuel inflation, limiting the Federal Reserve's policy flexibility.

US Treasury markets came under broad pressure. The 30-year Treasury yield rose about 5 basis points to 5.31%, the highest since June 2007. The 10-year yield settled at 4.72%.

Beyond oil and inflation risks, the US national debt nearing $40 trillion has deepened investor concerns about government borrowing and long-term fiscal health. According to CME Group's FedWatch tool, markets assign a roughly 36% probability to a Fed rate hike in September.

Major US indices on Monday (17th):

- Dow Jones Industrial Average: Down 272.63 points (0.51%) at 53,459.78 - Nasdaq Composite: Down 84.25 points (0.32%) at 26,644.91 - S&P 500: Down 40.70 points (0.52%) at 7,745.06 - Philadelphia Semiconductor Index (SOX): Up 203.96 points (1.64%) at 12,621.00 - NYSE FANG+ Index: Down 157.75 points (0.85%) at 18,498.64

Key Stocks

All five tech giants in the NYSE FANG+ Index closed lower. Meta (META-US) plunged 3.54%; Apple (AAPL-US) fell 0.11%; Alphabet (GOOGL-US) dropped 0.55%; Microsoft (MSFT-US) tumbled 3.04%; Amazon (AMZN-US) declined 0.51%.

Semiconductor stocks in the SOX index were mixed. AMD (AMD-US) fell 1.63%; Broadcom (AVGO-US) down 0.14%; NVIDIA (NVDA-US) down 0.07%; Applied Materials (AMAT-US) surged 5.55%; Qualcomm (QCOM-US) dropped 2.18%; Micron (MU-US) jumped 4.13%.

Memory stocks rallied broadly. Micron rose 4.13%; Western Digital (WDC-US) surged 5.35%; SanDisk (SNDK-US) soared 8.88%; Seagate Technology (STX-US) gained 2.19%; SK Hynix ADR (SKHY-US) rose 3.04%.

Taiwanese ADRs mostly gained. TSMC ADR (TSM-US) rose 1.08%; ASE ADR (ASX-US) up 0.94%; UMC ADR (UMC-US) up 1.98%; only China Telecom ADR (CHT-US) fell 0.21%.

Corporate News

US Commerce Secretary Lutnick told The Wall Street Journal that the US government does not want Apple sourcing memory chips from China, boosting Micron (MU-US) by 4.13% to close at $1,011.75 per share. Flash memory maker SanDisk (SNDK-US) surged 8.88% to $1,786.85, marking its sixth consecutive day of gains.

NVIDIA (NVDA-US) edged down 0.07% to $225.01. NVIDIA confirmed it will provide up to $105 billion in financial guarantees for OpenAI’s large data center project in Ohio, down from an earlier discussed $250 billion.

Coherent (COHR-US), an optical communications infrastructure provider, jumped 7.8% to $351.22, becoming the top gainer in the S&P 500; peer Lumentum (LITE-US) also rose over 4.6%.

Alphabet (GOOGL-US) dipped 0.6%. Berkshire Hathaway disclosed a significant increase in its stake in the Google parent company last week, now holding shares worth approximately $36 billion.

Amazon (AMZN-US) closed down over 0.5% at $261.31. Morgan Stanley noted that if Amazon can successfully expand AWS revenue, its stock could reach $500 by the end of 2027.

SpaceX (SPCX-US) soared 4.45% to $146.23 ahead of a new tranche of shares becoming eligible for sale.

Wall Street Analysis

José Torres, Senior Economist at Interactive Brokers, said, 'US markets have already seen significant gains; oil prices must retreat, or rates may stay high, increasing the risk of a market correction.'

Torres noted that economic weakness could reduce the Fed's need to hike, benefiting stocks short-term; but if growth continues to slow, it will eventually pressure corporate earnings and stock prices. He said the US economy remains in an expansion phase, albeit at a slowing pace.

Investors will closely watch earnings reports this week from major retailers Walmart (WMT-US), Target (TGT-US), Lowe’s (LOW-US), and Home Depot (HD-US). These results, during the back-to-school shopping season, may offer fresh clues on US consumer spending and household finances.

Additionally, the FOMC meeting minutes will be released on Wednesday, with markets seeking further insights into policymakers’ views on inflation, economic growth, and future rate policy.

All figures are updated as of press time; please refer to actual quotes for trading purposes.