Dow and Nasdaq Fall Monday as US-Iran Military Strikes Extend Geopolitical Risk; SK Hynix Plunges in Premarket

The Quick Take

• The Dow Jones and Nasdaq both declined Monday as fresh US-Iran military strikes extended geopolitical uncertainty that has been building in global markets.
• SK Hynix plunged in US premarket trading, extending Seoul's 15% crash and amplifying the tech sector pressure on Nasdaq composition.
• The combined shock of geopolitical escalation and semiconductor profit-taking tested US equity markets trading near record levels.

The Dow Jones Industrial Average and the Nasdaq Composite both declined Monday as fresh US military strikes against Iran extended the geopolitical uncertainty that has been building in financial markets over the past week. The deteriorating US-Iran relationship, centred on the strategic standoff over the Strait of Hormuz, has raised the prospect of sustained energy supply disruptions that historically generate broad risk aversion in equity markets. Investor's Business Daily's live market coverage confirmed a defensive shift among market participants responding to the escalation in Middle East hostilities, with energy, utilities, and defensive consumer staples displaying relative resilience against a backdrop of broad index weakness.

Adding to the pressure on US technology stocks, SK Hynix shares plunged in premarket trading, extending the sharp 15% decline that had played out in Seoul's KOSPI session earlier in the day. As a key supplier of high-bandwidth memory chips used in Nvidia's AI accelerator products, SK Hynix's share price is closely watched as a bellwether for AI hardware investment sentiment in US markets. The dual shock of geopolitical uncertainty from US-Iran strikes and semiconductor profit-taking in one of the AI complex's flagship names created an unfavourable backdrop for growth and technology equities, which are more sensitive than value sectors to shifts in risk appetite and discount rate expectations.

The combined headwinds tested the resilience of US equity markets that had been trading near record levels, supported by strong corporate earnings and expectations for eventual Federal Reserve rate normalisation. Monday's session highlighted the vulnerability of markets to event-driven shocks that simultaneously compress valuations through risk-off sentiment and oil-price inflation fears, while also questioning the near-term earnings sustainability of key AI-exposed holdings. Investors will be watching whether the US-Iran geopolitical situation de-escalates and whether SK Hynix provides reassuring HBM4 demand guidance that restores confidence in the AI chip demand narrative heading into the summer earnings season.

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