Uncertainty between Iran and the United States, along with selling in technology shares, weakened risk appetite in US stock trading on Tuesday. The Dow Jones Industrial Average fell 184.13 points, or 0.34 percent, to 53,791.85.
The Nasdaq Composite fell 0.6 percent, losing 159.91 points to reach 26,445.45, while the S&P 500 declined 24.92 points, or 0.32 percent, to close at 7,728.19. The S&P 500 and Nasdaq thus fell for a second consecutive trading session.
Technology shares face selling pressure
Communication services posted the steepest decline among the sectors in the S&P 500. The sector fell more than 1 percent, while Alphabet shares dropped about 3.6 percent and AppLovin shares fell about 6 percent.
Pressure on Alphabet shares continued after Google announced last week that it would restructure its artificial intelligence units. Shares of information technology companies also declined, with Apple losing more than 1 percent. Nvidia gave back its gains from earlier in the session and ended slightly lower.
Nvidia announced on Monday that it had partnered with six major asset managers to invest in artificial intelligence infrastructure. Through the partnership, the company aims to mobilize more than $500 billion in resources.
Strait of Hormuz uncertainty supports oil prices
Uncertainty over whether Iran will reopen the Strait of Hormuz and whether Washington and Tehran can reach a broader agreement also affected market movements.
Iranian officials reiterated that the strategic waterway would remain closed until Tehran's conditions were met. Iranian Foreign Minister Abbas Araghchi said negotiations could not resume unless the United States complied with the framework agreement reached in June and paid compensation for actions Iran defines as violations.
Oil prices rose in this environment. The price of a barrel of US benchmark West Texas Intermediate crude rose 1.5 percent to $83.4. The price of a barrel of international benchmark Brent crude also increased by about 1.6 percent to $89.1.
Investors are also tracking inflation indicators that could provide clues about the Federal Reserve's next monetary policy steps. Consumer inflation data for July is due Wednesday, while producer inflation data is expected Thursday.
European markets close mixed
European stock markets moved in different directions on Tuesday. Markets also monitored diplomatic efforts between the United States and Iran, while the pan-European Stoxx Europe 600 index rose 0.01 percent to 660.51 points.
Germany's DAX 40 index gained 0.26 percent, while Italy's FTSE MIB 30 index rose 0.08 percent. Spain's IBEX 35 index also increased 0.2 percent to 20,213.60 points.
In the United Kingdom, the FTSE 100 fell 0.17 percent to 10,844.19 points, while France's CAC 40 declined 0.13 percent to 8,714.94.
