Stocks Fall as Chip Selloff Outweighs Drop in Oil: Markets Wrap

(Bloomberg) — Wall Street kicked off the week on a cautious note, with a rout in chipmakers outweighing an oil decline as Treasury Secretary Scott Bessent pledged to isolate Iran from the global economy.

A gauge of semiconductor giants sank 3% days ahead of Nvidia Corp.’s earnings. While the results will likely serve as a reminder of the firm’s commanding lead, some big customers have been told that prices of servers containing its AI chips are going up more than 15% in many cases. The news spurred a rout in memory shares. Oil fell below $85, lifting bonds.

“We are launching an economic onslaught against Iran’s financial connections around the globe,” Bessent said at a press conference in Washington. He called the move “economic asphyxiation of this regime.”

Having recently surprised the market with a plan to boost buybacks of longer-dated debt, Bessent has also touted an initiative to tackle the budget deficit. The US could draw down some of its cash pile to fund the repurchases of higher-yielding older securities, CNBC reported.

“Details about US economic sanctions on Iran, the Treasury’s attempts to lower long-term yields, and economic data may shape much of the sentiment backdrop,” said Chris Larkin at E*Trade from Morgan Stanley. “But Nvidia and other tech earnings are positioned to be a major weight on the market’s momentum scale.”

Investors are also looking for Federal Reserve Chair Kevin Warsh to clarify his views on how the central bank should react to stubborn inflation when he speaks Friday at the annual gathering in Jackson Hole, Wyoming.

For the first time as leader of the world’s top central bank, Warsh will offer keynote remarks at the Kansas City Fed’s annual Economic Policy Symposium. With Treasury yields still elevated by sticky inflation and fiscal deficit concerns, he’s under pressure to act more like his predecessors and give clearer guidance of how the Fed might react over the remainder of the year.

“The Treasury’s unprecedented action in the bond market last week puts Warsh in a tough spot, especially for a Chair that seems to prefer less communication than more,” said Richard Reyle at Questar Capital Partners.

More recent data have shown inflation, while still above the central bank’s 2% goal, may be starting to cool. On Wednesday, the government will issue the latest personal consumption expenditures price index — the Fed’s preferred inflation gauge.

Corporate Highlights:

Taiwanese prosecutors indicted a senior Nvidia Corp. manager as part of a group that allegedly smuggled advanced AI chips into China, according to people familiar with the matter. Michael Saylor’s Strategy Inc. is adding a new pool of cash to its balance-sheet toolkit, part of an effort to preserve flexibility as its once-powerful financing model remains under pressure. SoftBank Group Corp. plans a record ¥1 trillion ($6.3 billion) retail bond sale, the biggest by any issuer in Japan, as the conglomerate raises funds for its investment commitments to OpenAI. Alibaba Group Holding Ltd. raised HK$80 billion ($10.2 billion) in Hong Kong’s biggest follow-on offering, underscoring its willingness to amass and spend vast sums to take the lead in global artificial intelligence. “A growing sense that AI adoption has peaked is sapping risk appetite and weighing disproportionately on the AI trade’s pick-and-shovel providers, whose earlier outperformance leaves them more exposed to a reassessment of demand.”

—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.

Some of the main moves in markets:

Stocks

The S&P 500 fell 0.3% as of 1:24 p.m. New York time The Nasdaq 100 fell 0.8% The Dow Jones Industrial Average rose 0.1% The MSCI World Index fell 0.2% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1657 The British pound fell 0.1% to $1.3628 The Japanese yen fell 0.1% to 159.16 per dollar The Canadian dollar fell 0.7% to 1.3859 Cryptocurrencies

Bitcoin rose 1.5% to $78,562.79 Ether rose 0.3% to $2,457.4 Bonds

The yield on 10-year Treasuries declined four basis points to 4.70% Germany’s 10-year yield was little changed at 3.25% Britain’s 10-year yield was little changed at 5.05% The yield on 2-year Treasuries was little changed at 4.23% The yield on 30-year Treasuries declined five basis points to 5.23% Commodities

West Texas Intermediate crude fell 2.6% to $84.83 a barrel Spot gold rose 0.7% to $4,635.95 an ounce ©2026 Bloomberg L.P.