US Stocks Slip as AI Chips Fall, Oil Drops on Iran Report

US stocks slipped on Wednesday as investors reduced positions in high‑beta AI chip names and crude prices fell sharply on reports of a US‑Iran framework for Strait of Hormuz shipping. Traders also positioned ahead of the Personal Consumption Expenditures inflation report due Thursday morning.

The S&P 500 edged down 0.07% to 7,513.54, the Nasdaq fell 0.12% to 26,623.4 and the Dow rose 0.41% to a record 50,668.5. Semiconductor and AI-related names led declines after gains earlier in the week: Nvidia dropped about 1.9%, Intel fell 3.4%, Advanced Micro Devices lost 1.7% and Qualcomm plunged 7.8% as investors scaled back exposure to the sector. Micron rose after an analyst upgrade and a higher price target.

West Texas Intermediate crude fell roughly 5.7% to $88.53 a barrel and Brent dropped about 4.7% to $94.91 following reports of a draft memorandum that would see U.S. forces withdraw from Iranian waters and commercial vessel transit through the Strait of Hormuz return to pre‑war levels within 30 days. The White House called the reported framework “completely fabricated.” Former President Donald Trump posted “NO AGREEMENT” on social media.

Energy shares declined about 1.2% on the session. Consumer discretionary led sector gains, helped by increases in Tesla and Amazon, while consumer staples also attracted flows ahead of the inflation print. Financials fell, with several large banks posting losses. Zscaler shares plunged more than 30% after the company issued weaker revenue guidance. Micron remained an outlier in semiconductors, rising after the analyst update.

Traders reduced risk ahead of the Fed’s preferred inflation gauge. The PCE Price Index is scheduled for release Thursday at 8:30 a.m. ET, alongside the second reading of first‑quarter GDP and initial jobless claims. After‑hours earnings from Marvell Technology, Salesforce and Snowflake are due Wednesday, with Dell Technologies reporting Thursday evening.

Some market observers note that core PCE can track oil with an approximate two‑month lag, which means April readings may reflect higher crude prices from March. Technical indicators show the S&P 500 trading above its 20‑day exponential moving average near 7,359, with near‑term resistance around 7,626 and support near 7,445. Market breadth was mixed, with a substantial number of individual issues still at or near 52‑week highs despite pressure on the largest AI‑related stocks.