Wall Street experienced a broad decline on Tuesday as a downturn in artificial intelligence (AI) stocks weighed heavily on major indexes. The S&P 500 slipped 0.4 percent despite gains in most of its constituent stocks, while the Nasdaq composite, more heavily weighted toward technology, dropped 1.2 percent. The Dow Jones Industrial Average fell 130 points, or 0.2 percent, from its recent record high.

The weakness in AI-related shares followed a sharp decline in Asian markets, led by Samsung Electronics, which tumbled 6.9 percent in Seoul. The tech giant reported a preliminary estimate indicating a roughly 1,800 percent surge in operating profit for the second quarter compared to the previous year. While analysts described the figures as unexpectedly strong, the stock's prior gains—having more than doubled so far in the year—left little room for further investor enthusiasm.

Similarly, on Wall Street, shares of AI-focused semiconductor companies dropped amid concerns that sky-high valuations may not be justified by the sector’s current or near-term profitability and productivity gains. Advanced Micro Devices fell 6.5 percent, Intel declined 9.7 percent, and Micron Technology dropped 4.7 percent. Speccax, which includes operations in the AI business, declined 6.8 percent on its first trading day after joining the Nasdaq 100 index.

Beyond the tech sector, Vertex Pharmaceuticals declined 1.4 percent after announcing plans to acquire Crinetics Pharmaceuticals for $85 per share in cash. Crinetics, specializing in endocrine disease therapeutics, surged 98.7 percent on the news. Meanwhile, Rivian Automotive’s shares plunged 18.1 percent following the electric vehicle manufacturer’s announcement to sell 75 million shares, a move that will dilute existing shareholders’ stakes.

The S&P 500 closed down 33.58 points at 7,503.85, the Dow fell 130.76 points to 52,925.15, and the Nasdaq ended the day at 25,818.69, down 302.47 points.

Adding to market jitters, oil prices climbed following reports from the British military that three tankers were hit by projectiles in the Strait of Hormuz, a key global oil transit route. The United States subsequently revoked a license permitting the sale of Iranian oil under an interim agreement aimed at deescalating tensions between the two countries. These developments raised doubts about the potential full reopening of the Strait to oil tankers.

International benchmark Brent crude rose 3 percent to settle at $74.16 per barrel, exerting additional inflationary pressure. Bond markets reacted with yields on the 10-year U.S. Treasury note increasing to 4.54 percent from 4.48 percent the previous session and far above the pre-Iran conflict level of 3.97 percent.

Elevated inflation concerns have heightened apprehension that the Federal Reserve and other central banks may continue to raise interest rates, a move that could slow economic growth and weigh on asset prices across multiple investment classes.

Global equities also suffered losses, with South Korea’s Kospi index falling 4.9 percent—largely due to Samsung Electronics’ share of the market—while Japan’s Nikkei 225 and Germany’s DAX closed down 2.1 percent and 1.4 percent, respectively.