The U.S. stock market opened lower on Tuesday evening, Beijing time. Traders are assessing the recent streak of record highs while monitoring the latest developments in U.S.-Iran relations and movements among major technology stocks.
The Dow Jones Industrial Average fell 209.77 points, or 0.41%, to 50,869.11. The Nasdaq Composite dropped 64.17 points, or 0.24%, to 27,022.64. The S&P 500 index declined 14.04 points, or 0.18%, to 7,585.92.
Shares of Alphabet moved lower after the company stated it would raise $80 billion through a stock sale to fund artificial intelligence infrastructure development. This includes a $10 billion investment from Berkshire Hathaway.
Alphabet's stock had initially risen in after-hours trading on Monday before turning negative.
Adam Crisafulli of Vital Knowledge described the news of Alphabet's equity financing as "ultimately a negative." He noted, "If the greatest business model in the history of capitalism – in terms of scale, growth, profitability, and cash flow – cannot fund AI from its own internal operations, then who can?"
Technology stocks remained in focus. NVDA 3xLongSG261006 (ASX: NVIW) saw gains in pre-market trading. Shares of Hewlett Packard Enterprise also surged 25% after the technology company provided an optimistic outlook for the current quarter and raised its full-year guidance, significantly exceeding Wall Street expectations. The company's second-quarter results also marked its largest earnings beat since 2018.
Shares of Marvell Technology also jumped more than 21% after Nvidia CEO Jensen Huang suggested the semiconductor company could become the next trillion-dollar enterprise.
Huang stated, "When you break a computing problem into many pieces and distribute it across a data center, connectivity becomes critical. That is why Marvell is so important."
Major stock indices reached new all-time highs on Monday, led by gains in the technology sector. Over the past few weeks, enthusiasm for artificial intelligence-related trades has fueled strong market performance. Katie Stockton, founder of Fairlead Strategies, indicated there are no signs yet that the stock market rally is over.
Stockton said, "The S&P 500 has been up for nine consecutive weeks, which naturally reflects positive momentum. Short-term, intermediate-term, and long-term momentum are all positive currently, and we are also seeing a series of flag breakout patterns – sharp rallies followed by brief consolidation, then further advances." She pointed to Dell Technologies as a recent example.
"These rallies are indeed explosive. Unfortunately, that also means they often end dramatically, but for now we are not getting any confirmed sell signals from overbought/oversold indicators suggesting this advance is finished."
Oil prices also rose on Monday following reports from Iranian state media that the country's negotiators would cease exchanging messages with the United States through intermediaries. Iran's Tasnim news agency also stated that Iran would act to completely block the Strait of Hormuz. The report further added that "no dialogue will take place" until Israel completely halts all attacks on Lebanon and Gaza and fully withdraws from occupied Lebanese territory.
In response, U.S. President Donald Trump stated in a phone interview that he "doesn't care at all" if peace talks with Iran break down. In a subsequent Truth Social post, Trump said he had "a very productive call" with Israeli Prime Minister Benjamin Netanyahu.
In another post, Trump added that negotiations with Iran are "continuing at a rapid pace."
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