S&P 500 slips 0.2% as AI jitters and Iran conflict weigh

The S&P 500 fell 0.2 percent to 7,443.28 as AI-related chip stocks slid ahead of Nvidia's earnings and U.S.-Iran tensions escalated. The Dow Jones Industrial Average dropped 0.6 percent to 51,839.26, while the Nasdaq Composite slipped 0.1 percent to 25,508.07.

"The market is so reliant on the AI trade today, and Nvidia is obviously the big boy in the room," said Erik Kratz, chief investment officer at Arena Private Wealth. "It's got implications across everything."

Chip, memory and other AI infrastructure names were among the biggest losers in the S&P 500. Sandisk slid 6.5 percent and Ciena fell 6 percent. The Philadelphia semiconductor index was down about 5 percent for the week, according to Reuters data. The S&P 500 sits about 2 percent below its record high as rising Treasury yields fuel worries about borrowing costs for companies investing heavily in AI infrastructure.

Nvidia Earnings Loom Over AI Trade

Nvidia, whose chips underpin much of the AI infrastructure buildout, reports second-quarter results Wednesday. The company recently teamed up with six major financial institutions on financing platforms targeting more than $500 billion for AI infrastructure, highlighting the massive capital required as companies and governments race to build data centers for AI workloads. Its results could offer new insight into the demand underpinning that sector.

Yardeni Research pointed to the return of "DeepSeek fears" after Moonshot's Kimi K3 model launch, noting that the SOXX and S&P 500 Semis index could slide 12 percent more to key technical support. James E. Thorne, chief market strategist at Wellington-Altus Private Wealth, pushed back, saying "No, the AI trade is not over. Yes memory is a buy."

Rising Treasury yields added pressure on equities. The 30-year yield reached its highest level since 2007 this week, and the 10-year yield stood at 4.592 percent on Monday. The Treasury Department's efforts to calm markets by doubling buybacks for long-dated debt offered only brief relief, with yields rebounding on Thursday.

Iran Conflict Pushes Oil Above $90

Three U.S. service members died in the Middle East conflict over the weekend, and U.S. Central Command conducted a fresh round of attacks on Iran on Monday evening. President Donald Trump said in a post on Truth Social that "Every time Iran kills an American Soldier they will pay for that killing many times over!" Brent crude climbed above $90 a barrel during the session before settling at $88.46, down 0.85 percent. WTI crude fell 0.3 percent to $82.98. Spot gold traded at $4,029.09 per ounce.

"Investors still don't think Trump has the tolerance for a material escalation of the U.S. force posture in the Middle East and if that's the case, then some type of a diplomatic resolution is inevitable," said Adam Crisafulli of Vital Knowledge.

The Federal Reserve's Jackson Hole symposium runs August 27-29, where Fed Chair Kevin Warsh will make his first appearance since taking office in May 2026. With July's personal consumption expenditures report and U.S. economic growth data due before the symposium, investors will get an updated picture of inflation and economic momentum that could reshape expectations for interest rates. Markets are pricing a 35 percent chance of a September rate hike, rising to 66 percent by December.

This article is for informational purposes only and does not constitute investment advice.