The Dow Jones Industrial Average fell by 515 points, or 1%, as investors became more cautious following the conclusion of the high-profile summit between US President Donald Trump and Chinese President Xi Jinping, which ended without major policy developments.
The downturn began dramatically, with Wall Street opening lower as the Dow dropped 436 points, the S&P 500 decreased by 1.13%, and the Nasdaq sank 1.63% just minutes after the opening bell. Market analysts estimated that nearly $1 trillion in market value was erased from US equities in the first five minutes of trading, largely due to concerns over inflation and rising Treasury yields impacting investor sentiment.
The declines were particularly prominent in technology and semiconductor stocks, which had previously led Wall Street’s AI-driven ascent. Intel fell by 6%, while AMD and Micron Technology recorded declines of 3% and 5%, respectively. Nvidia lost 3%, putting additional pressure on chip manufacturers, as the Philadelphia Semiconductor Index dropped 4%.
Analysts noted that investors were cashing in on gains in tech stocks after an extended rally. Adam Crisafulli of Vital Knowledge commented that the recent surge in the sector had become “extremely unsustainable,” making it susceptible to profit-taking regardless of news headlines.
Broader market sentiment deteriorated further as Treasury yields rose to multi-month highs. The yield on the 30-year US Treasury bond surpassed 5.1%, its highest point in almost a year, following a series of inflation reports this week that indicated ongoing price pressures.
Concerns about inflation intensified with the rise in crude oil prices due to escalating tensions in the Middle East. US West Texas Intermediate crude increased by 3% to around $104 per barrel, while Brent crude also rose 3% to nearly $109 a barrel, after Trump indicated he would “not be much more patient” with Iran and encouraged Tehran to negotiate.
The increase in yields and oil prices heightened fears that inflationary pressures could disrupt the AI-driven rally that recently pushed the S&P 500 past the 7,500 mark for the first time and helped the Dow regain the 50,000 level in the prior session.
Investors were also left disappointed by the results of the Trump-Xi summit, which wrapped up without any substantial trade or economic announcements. While both sides reportedly agreed to keep the Strait of Hormuz open, the lack of tangible breakthroughs was deemed underwhelming by the markets.
Boeing shares declined another 2% after dropping nearly 5% in the previous session, as investors reacted unfavorably to Trump’s statement that China would purchase 200 Boeing jets—only slightly higher than earlier expectations.
In addition, crypto-related stocks faced pressure amid the overall risk-averse sentiment. Coinbase fell by 8%, while Strategy decreased by 6%, as Bitcoin dipped below the $80,000 threshold, approaching a weekly loss.
Amid the widespread decline, Microsoft stood out as a rare gainer, rising by 3% after billionaire investor Bill Ackman disclosed that Pershing Square had built a stake in the company.
