Wall Street drops as oil spikes and chip slump hit major indexes

Wall Street indexes fell on Thursday as oil prices surged and semiconductor shares dropped, pulling the Dow, S&P 500 and Nasdaq lower.

Market Move

The Dow Jones slipped 0.07% to 51,145.18, the S&P 500 lost 0.61% to 7,753.82 and the Nasdaq fell 1.37% to 27,160.19. Oil jumped after attacks on shipping in the Strait of Hormuz and a cut in U.S. output caused by hurricane activity, raising concerns over supply and inflation. Treasury yields inched higher, with two‑year notes climbing as markets price a 67.9% chance of a Fed rate hike in December, while most expect rates to pause this month.

Sector Highlights

Energy stocks led gains, while chip makers fell 3.0% after a revenue target cut for OpenAI was disclosed and worries that high rates could curb the AI‑driven debt‑heavy build‑out. Samsung’s record profit forecast did not lift sentiment and its shares fell; Micron dropped 4.1%. Broadcom slid 3.9% and Oracle 4.9% after reports they were seeking billions in financing for OpenAI projects.

Reactions

Peter Cardillo, chief market economist at Spartan Capital Securities, said the market is nervous because of high oil prices and upcoming earnings, describing the dip as profit‑taking. PepsiCo rose 2.1% on plans to cut spending and lower its profit forecast. Starbucks fell 4.2% after news of a possible Chipotle purchase, while Chipotle jumped 7.3%. Palantir gained 1.6% after Goldman Sachs upgraded it to "buy".

Context

Rising oil prices and tighter credit conditions often pressure equity markets, especially tech stocks that rely on borrowing for AI projects. The Fed’s recent rate hike and possible December increase add to the caution among investors.