US markets fall, futures extend sell-off as West Asia tensions escalate, oil, yields rise

US markets began the new trading week on a negative note and futures on Monday evening are extending the selling pressure amidst a sell-off in chip stocks, and an escalation of tensions between the US and Iran, which has resulted in a spike in oil prices and bond yields.

The Dow Jones fell 140 points overnight, while the S&P 500 fell 0.8%. Chip stocks led the sell-off in the Nasdaq Composite, which was down 400 points, while the Nasdaq 100 index fell over 550 points, or close to 2%.

Nearly every major chip stock, from Nvidia, to AMD, Intel, Sandisk, Western Digital, Micron, fell between 3.5% to 13% in Monday's trading session.

Futures this morning are also under pressure. The Dow futures are down close to 100 points, while the Nasdaq futures are down by a similar quantum.

The big trigger for the morning will be US President Donald Trump's address to the nation at 9 PM Eastern time or 7:30 AM Indian Standard Time (IST).

Why Chip Stocks Fell On Monday?

Chip stocks took cue from the sell-off in SK Hynix in South Korea, which fell over 15% to mark its biggest single-day fall on record. Trailing its peer, Samsung Electronics shares also sold off 10%, taking the KOSPI down to another lower circuit, bringing trading to a halt for a brief period.

The US-listed shares of SK Hynix or the ADRs, after rising over 15% on their trading debut last Friday, declined over 9% as well.

US-Iran Tensions Escalate, Oil Spikes

Crude oil prices spiked after the US and Iran continued to make tit-for-tat attacks, in signs of rising tensions after the recent ceasefire.

US President Donald Trump demanded a 20% fee for every cargo vessel that the US helps navigate through the Strait of Hormuz, leading to further fears of increasing costs and inflationary pressures.

Brent Crude rose nearly 10% overnight to $83 a barrel, while WTI crude reversed initial losses and is also nearing the $80 a barrel mark.

Bond yields have also seen a spike in the US with the 10-year yield crossing the mark of 4.6%, while the 30-year yield now trading at 5.1%.

What Are The Major Wall Street Triggers For Tuesday?

Besides the rising oil prices and increasing tensions, there are multiple cues that Wall Street would be reacting to going into Tuesday's trading session.

The most important of them all would be the June inflation print, which is the last one before the US Federal Reserve meets later this month to decide on the course of monetary policy.

Alongside the inflation data, Fed Chair Kevin Warsh will be testifying before the Congress, while four other Fed officials are scheduled to speak elsewhere.

Earnings season also picks up steam with nearly all major banks reporting their numbers over the course of the next two days, with JPMorgan, Bank of America, Goldman Sachs, Wells Fargo, Citigroup reporting before market open today.