(Updates with latest market prices and developments.)
US benchmark equity indexes were lower intraday, with chip stocks among notable laggards, while oil prices jumped following reports that Iran hit a Qatari liquefied natural gas tanker near the Strait of Hormuz.
The Nasdaq Composite was down 0.7% at 25,946.1 after midday Tuesday, while the S&P 500 shed 0.3% to 7,516.6. The Dow Jones Industrial Average dropped 0.3% to 52,913.7 after having hit a new high in the previous session.
Among sectors, industrials saw the steepest decline intraday Tuesday, while energy and real estate paced the gainers.
Chipmaker Intel's (INTC) shares were down 9.3%, the second-worst performer on the S&P 500. Western Digital (WDC), Applied Materials (AMAT), Marvell Technology (MRVL), Micron Technology (MU), and Advanced Micro Devices (AMD) also saw sharp declines.
"Equities are rotating out of technology after Monday's rebound, as an Asian chip selloff revived (artificial intelligence)-valuation worries and pushed (South Korea's) KOSPI down 7.5%," Saxo Bank said in a report.
A global tech sell-off on Tuesday followed the release of preliminary quarterly results by Samsung Electronics, as well as a Reuters report on Chinese firm DeepSeek developing its own AI chip that could allow it to rely less on US chipmaking giant Nvidia (NVDA) and Huawei.
West Texas Intermediate crude oil was up 2.9% at $70.50 per barrel intraday, while Brent advanced 3.1% to $74.22.
Iran attacked a Qatari LNG ship transiting near the Strait of Hormuz, the world's most important chokepoint for crude flows, according to Qatar's foreign ministry spokesperson Majed Al Ansari.
"We demand that the Islamic Republic of Iran immediately cease all practices that undermine regional security or threaten the safety of international maritime navigation, (and) refrain from endangering global energy supplies (and) the resources of the countries of the region in pursuit of narrow interests," Al Ansari said in a social media post Tuesday.
US Treasury yields were higher intraday, with the 10-year rate up 4.2 basis points at 4.52% and the two-year rate rising 2.7 basis points to 4.15%.
In economic news, the US trade deficit grew in May to its widest since March 2025, as imports increased and exports fell, government data showed.
"Surging imports and a rare decline in exports spiked the US trade deficit to its highest level in more than a year," BMO Capital Markets said in a note. "Despite tariffs, the trade deficit has returned to levels of late 2024, before importers began front-loading purchases, suggesting little overall progress in shrinking the trade gap."
In company news, SpaceX (SPCX) drew bullish views from Wall Street as the rocket and satellite company joined the Nasdaq 100 index, with analysts pointing to AI, satellite connectivity and space-enabled solutions as key growth drivers.
Deutsche Bank, RBC Capital Markets and Morgan Stanley initiated coverage of SpaceX with their highest ratings.
The stock was down 5.2% intraday.
Gold fell 0.2% to $4,157.30 per troy ounce, while silver lost 1.4% to $61.46 per ounce.
