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Update: US Equity Indexes Decline Amid Sell-Off in Chipmakers, Iran's Warning on Red Sea Route

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(Updates with index/price moves and geopolitical news from the first paragraph.)

US equity indexes dropped as a sell-off in chipmakers pushed technology sharply lower, and Iran threatened to close the Red Sea crude oil route if President Donald Trump orders an attack on Tehran's power infrastructure.

The Nasdaq declined 1.8% to 25,786.2, the S&P 500 fell 0.8% to 7,508.7, and the Dow Jones Industrial Average declined 0.5% to 52,386.8.

Technology slumped 2.3%, the worst of a trio of decliners in the final leg of trading.

Shares of Taiwan Semiconductor Manufacturing (TSM) slid 3.1% after the firm earmarked an additional $100 billion to increase its chipmaking capacity in the US, raising its total planned investment to $265 billion, Bloomberg reported Thursday, citing a US official. Taiwan Semiconductor also reported Q2 results on Thursday, with year-over-year earnings and net revenue rising and Q3 sales guidance beating consensus.

Among stocks with market capitalization exceeding $200 billion each, 15 out of the bottom 20 names were from the technology sector, according to data compiled by Finviz. Half of the decliners were semiconductor firms, the data showed. The worst performer was SanDisk (SNDK), down 11%.

In company news, UnitedHealth's (UNH) shares jumped 3.1%, making it one of the Dow's top gainers, after the company posted higher Q2 adjusted earnings and revenue and raised its 2026 adjusted EPS outlook.

In geopolitical news, the US military launched a sixth consecutive night of strikes on Iran, with the country's media reporting explosions on Qeshm Island, Bandar Abbas, and Chabahar, according to Al Jazeera, a Middle Eastern broadcaster.

The Iranian military has warned "all infrastructure in the region will be crushed under steel blows" if the US carries out its threat to attack Iran's civilian sites, the Al Jazeera report said. Iran has asked Yemen's Houthi movement to stand ready to close the Red Sea oil route if the US strikes Iranian power infrastructure, Reuters reported, citing three sources.

Total volumes of petroleum transiting Bab el-Mandeb amounted to 7.4 million barrels per day in June, or about 7% of global oil output, up from 4.2 million bpd a year ago, MarineLink reported, citing Kpler data.

The front-month US West Texas Intermediate fell 0.7% to $79.08 a barrel, hovering around its highest in about a month amid a rally that began after the US renewed strikes on Iran a week ago. North Sea Brent futures retreated 0.7% to $84.34 a barrel, close to its month-high.

Iraqi crude loadings more than doubled to average roughly 1.2 million barrels per day in the first half of July, Reuters reported, citing Kpler data and a source with direct knowledge of the flows, as exports accelerated following months of restricted shipments.

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(Updates with index/price moves and geopolitical news from the first paragraph.)US equity indexes edged up as a boost from an unexpected drop in producer price inflation was partially offset by Washington setting the stage for complex operations in Iran, which has signaled its allies could shut the maritime gateway to the Red Sea.The Nasdaq rose 0.4% to 26,221.8, the S&P 500 climbed 0.2% to 7,559.1, and the Dow Jones Industrial Average advanced 0.2% to 52,611.4 ahead of Wednesday's close. All three gauges briefly traded moderately lower earlier in the session. Communication services and consumer discretionary topped the gainers, while utilities led the decliners.The US Producer Price Index fell 0.3% in June following a 0.6% increase in May, below the flat consensus in a Bloomberg-compiled survey. Excluding food and energy, core PPI rose 0.2%, slower than the 0.3% gain expected and a 0.1% rise in May. PPI was up 5.5% year-over-year in June, versus the 6% gain in May, while core PPI climbed 4.7%, up from 4.6% in May.Most US Treasury yields fell in the final leg of trading, with the 10-year down four basis points to 4.55% and the two-year declining 6.3 basis points to 4.13%.Recent waves of US strikes on Iran aimed at forcing open the Strait of Hormuz are also targeting Iranian military capabilities that the US would want to destroy before executing more complex operations against Iran, three US officials told Reuters.The officials, who were granted anonymity to discuss military matters, said the strikes effectively strengthen Trump's additional military options.Iran currently has no plans for negotiations with the US, CNN reported, citing the country's foreign ministry spokesperson, who added that Tehran would not adhere to any agreement if Washington "breaches its obligations."Iran is now signaling it could use Yemen's Houthi allies to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the world's most important energy arteries at risk, a separate report from Reuters said. As US strikes deepen inside Iran and Houthi attacks escalate in tandem, analysts said Tehran is widening the conflict and seeking to increase pressure on Washington by extending the threat to global trade and energy supplies beyond the Gulf, the news report added.The front-month global benchmark North Sea Brent rose 0.4% to $85.05 a barrel, and the US West Texas Intermediate climbed 0.5% to $79.71 a barrel, albeit off session highs.

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Update: US Equity Indexes Decline Amid Sell-Off in Chipmakers, Iran's Warning on Red Sea Route | FINWIRES