Wall Street closed lower on Monday after President Donald Trump announced he was reinstating a naval blockade on Iranian shipping through the Strait of Hormuz, a move he laid out in a post on Truth Social that sent crude oil prices sharply higher and drove investors out of technology stocks. Trump said the United States would from now on be known as “The Guardian of the Hormuz Strait” and would collect a 20% fee on cargo moving through the waterway, reigniting fears of a wider supply shock more than four months into the U.S.-Iran conflict that began in late February.

The Dow Jones Industrial Average fell 138.37 points, or 0.26%, to close at 52,498.64. The S&P 500 dropped 0.79% to 7,515.34, and the tech-heavy Nasdaq Composite sank 1.55% to 25,873.18. Semiconductors led the retreat, while energy shares drew buyers as oil rallied — a continuation of the rotation out of high-flying tech names that has run through much of the summer.

The geopolitical backdrop dominated trading. U.S. Central Command said it carried out its fourth strike in a week against Iran on Sunday, retaliation for an Iranian attack on a Cyprus-flagged container ship, while Tehran declared the strait closed “until further notice” — a claim Washington rejected. Iran struck back at U.S. allies across the region, including reported attacks on Kuwait, Jordan, and Qatar. At the terms Trump laid out, a 20% transit fee would run roughly $32 million for a single supertanker, far above the up-to-$2 million charges Iran had previously imposed. OPEC, meanwhile, trimmed its 2026 oil demand growth forecast to 800,000 barrels a day.

Market movers

Chip stocks set the tone. Shares of SK Hynix tumbled about 9% after a brokerage report suggested the memory maker could fall short of its quarterly profit estimates — a sharp reversal from last week, when the stock soared following its debut on U.S. exchanges. The selling spread to Micron Technology, Seagate Technology, and Sandisk, and reached European names including ASML, Infineon Technologies, and STMicroelectronics. In South Korea, Samsung Electronics slid 10.7%.

Not every call was bearish. Citi raised its price target on Apple to $365 from $315, with analyst Asiya Merchant writing that the company’s pricing power and loyal customer base should offset margin pressure and limit any demand weakness. The new target implies about 16% upside, and Merchant pointed to the iPhone 18 launch in September as a potential catalyst. Apple, which reports earnings July 30, has gained 18% this year. Biogen rose about 5% after Truist upgraded the stock, citing optimism over the drugmaker’s Alzheimer’s pipeline.

On the earnings season ahead, Sam Stovall, chief investment strategist at CFRA Research, said second-quarter S&P 500 earnings per share are expected to climb 20.9% from a year earlier, well above the 11.6% average quarterly gain since 2009. He noted the index’s forward price-to-earnings ratio stood at 21.3 times at the end of June, a premium to its 10-year average that leaves little room for disappointment.

Commodities and volatility

Crude was the day’s biggest story. West Texas Intermediate jumped more than 8% to around $77 a barrel, its highest in about a month, while Brent crude climbed toward $79. Tanker traffic through Hormuz — a chokepoint for roughly a fifth of the world’s seaborne oil — remained sharply reduced, with maritime trackers reporting only a handful of crossings in recent days. Gold slipped, falling about 1.8% to roughly $4,015 an ounce as the dollar firmed, and the 10-year Treasury yield held near 4.60%. Airlines and other fuel-sensitive shares came under renewed pressure as investors weighed the risk that higher energy costs feed back into inflation.

Attention now turns to key inflation data due later this week and the opening wave of second-quarter corporate results, which will test whether earnings can justify valuations that have climbed alongside this year’s AI-driven rally. Under Fed Chair Kevin Warsh, the central bank has held a hawkish line, and traders are watching for any signal on rates as oil’s renewed climb complicates the inflation picture heading into the back half of 2026.

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