U.S. Stocks Snap Nine-Day Winning Streak, Broadcom Sinks, Metals Sell Off

Market Overview

Rising tensions in the Middle East pushed oil prices higher, while renewed inflation concerns and stronger-than-expected U.S. economic data reinforced expectations for tighter monetary policy. As a result, the S&P 500 and Nasdaq ended their nine-session winning streaks, and the Dow Jones Industrial Average fell 620 points.

Broadcom reported strong quarterly results, with AI-related revenue surging more than 140% year-over-year. However, softer-than-expected guidance triggered a 12% decline in after-hours trading. Precious metals and cryptocurrencies also came under pressure, with silver falling 2.76%, spot gold losing more than 1%, Bitcoin testing its March lows, and Ethereum dropping below $1,800. Meanwhile, Chinese equities outperformed, with the ChiNext Index rising 1.65%.

U.S. Stocks End Nine-Day Rally

Escalating geopolitical risks, inflation concerns, and stronger economic data weighed on investor sentiment, ending the recent rally in U.S. equities. The Dow fell 620 points, while both the S&P 500 and Nasdaq closed lower.

The Magnificent Seven underperformed the broader market, and the Software ETF has declined 7% over the past two sessions. Meta was the exception, gaining 4.2%. Semiconductor stocks remained relatively resilient, led by Intel (+4.4%), Sandisk (+6.7%), and Marvell (+3.7%).

Broadcom Drops Despite Strong AI Growth

Broadcom reported record quarterly revenue, up 48% year-over-year, while AI semiconductor revenue surged more than 140%.

However, investors focused on guidance. The company projected third-quarter AI revenue of approximately $16 billion, more than triple last year's level but below market expectations, triggering profit-taking and a 12% decline in after-hours trading.

Broadcom continues to expand its AI infrastructure business, including custom chip development for OpenAI and large-scale deployments for Meta.

Metals and Crypto Markets Under Pressure

Silver fell 2.76% and copper declined 2.37% as metals broadly retreated. Spot gold dropped more than 1% to $4,433 per ounce as a stronger U.S. dollar and rising Treasury yields reduced demand for precious metals.

Cryptocurrencies also weakened. Bitcoin fell 3.3% and retested its March lows, while Ethereum lost more than 7%, breaking below the $1,800 level.

Middle East Tensions Lift Oil Prices

Geopolitical risks intensified after reports that Kuwait International Airport was targeted by a drone attack, temporarily disrupting operations and prompting an airspace closure.

WTI crude rose nearly 2% to $95.6 per barrel, while Brent crude approached $98. Despite President Trump's comments that negotiations with Iran were progressing well, concerns remain that maritime disruptions could continue through September.

The OECD warned that if the conflict extends into 2027, global economic growth could slow to 1.8%, while higher energy prices could add approximately 1.3 percentage points to inflation.

Market OutlookU.S. Equities Pull Back as AI Trade Cools

The market's nine-session rally ended as investors reassessed elevated valuations and the impact of higher interest rates.

Broadcom's strong earnings but weaker-than-expected guidance highlighted growing concerns about expectations within the AI sector. Investors will closely watch upcoming economic data and Treasury yields to determine whether the current pullback remains temporary or develops into a broader correction.

Oil Prices and Inflation Back in Focus

The latest developments in the Middle East have increased concerns over energy supply disruptions, keeping upward pressure on crude oil prices.

With WTI nearing $96 and Brent approaching $98, investors are paying close attention to the inflation outlook. A prolonged conflict could drive energy costs higher, weigh on global growth, and complicate central bank policy decisions in the months ahead.