Stocks fall as Trump reimposes Iran blockade, chipmakers slide

Wall Street sold off as Donald Trump said he would reinstate a blockade on Iranian ports, pushing oil prices sharply higher and hitting semiconductor shares across the market. The Nasdaq led the decline, while energy stocks helped cushion the Dow as investors recoiled from renewed risk around the Strait of Hormuz and the wider Middle East.

West Texas Intermediate futures jumped above $77 a barrel and Brent climbed past $82 after the announcement, a move that raised immediate concerns about shipping through one of the world’s most important oil chokepoints. The Strait of Hormuz typically handles about 20% of global oil traffic, and traders have already been on edge after Iran attacked a Qatari tanker there on July 7, when Brent settled 3% higher at $74.16 and WTI rose 2.8% to $70.44. In that earlier incident, the UK Maritime Trade Operations Centre said another tanker was struck about 8 nautical miles east of Limah, Oman.

Chip stocks bore the brunt of the equity pressure. U.S.-listed SK Hynix fell 8% after its strong Nasdaq debut on Friday, when the shares had surged 13%, and the stock later dropped 15.4% in Seoul, its biggest fall on record. Micron Technology slid 5%, Sandisk lost 13%, Seagate Technology fell 6%, Advanced Micro Devices slipped 4% and Intel declined 7%. Ben Fulton of WEBs Investments said the market was still searching for a durable answer to the region’s escalation, calling it a “range-bound” market until there is a true solution in the Middle East. Second-quarter S&P 500 earnings are expected to show profit growth of more than 23% from a year earlier, June consumer price data is due Tuesday and a slate of economic releases and congressional testimony from Federal Reserve Chair Kevin Warsh follows.

On July 13, Brent climbed more than 4% to $78.82 a barrel as U.S. Central Command carried out dozens of strikes on Iran after accusing Iranian forces of attacking the MV GFS Galaxy. Iran responded with missile and drone attacks on the UAE, Qatar, Kuwait, Oman and Bahrain, while maritime traffic through Hormuz fell to six tracked crossings in a 12-hour stretch, far below the 18 to 22 daily crossings seen earlier in the month.