U.S. stocks took a beating Tuesday as the rotation out of high-flying chip and artificial-intelligence names resumed with a vengeance. The Nasdaq 100 dropped over 3%, dragging the S&P 500 back below 7,300, while a parallel collapse in oil prices — crude sank roughly 6% after Israel and Iran halted strikes — did little to steady equities ahead of Wednesday's pivotal consumer price report.

Rather than cuts, markets are now pricing roughly even odds — around 50% — that the Federal Reserve delivers a rate hike as soon as October. That hawkish tilt continues to pressure the most richly valued corners of the market, and Tuesday it was tech that bore the brunt.

President Donald Trump said on social media that a U.S. helicopter was shot down while conducting a patrol mission over the Strait of Hormuz. He stated that the aircraft had two pilots on board, both of whom are safe, but added that the U.S. "must respond to the attack."

Across U.S. equity markets by midday Tuesday, losses were broad but concentrated in technology. The S&P 500 fell 1.6% to about 7,228, while the Dow Jones Industrial Average proved more resilient, slipping 0.5% to 50,535 as defensive and financial names cushioned the blow. The Nasdaq 100 slid 3.3% to around 28,437. The small-cap Russell 2000 gave back an early advance to trade down about 1.3%.

The VIX soared 14%. Gold offered no haven, with prices easing 2% to around $4,264 an ounce, while silver cratered over 5%.

Tuesday's Performance In Major U.S. Indices

According to market data:

• The Vanguard S&P 500 ETF (VOO) fell 1.6%.
• The SPDR Dow Jones Industrial Average ETF Trust (DIA) slipped 0.6%.
• The Invesco QQQ Trust (QQQ) slid 3.3%.
• The iShares Russell 2000 ETF (IWM) dropped 1.3%.

AI-Optical Complex Implodes While Staples Catch The Bid

The Technology Select Sector SPDR Fund (XLK) was the session's clear laggard, sinking 5.1%. The damage was deepest among the AI-optical and data center-infrastructure names that have led the 2026 melt-up. The VanEck Semiconductor ETF (SMH) sold off sharply as Coherent Corp. (COHR) cratered 15.2%, Marvell Technology, Inc. (MRVL) tumbled 12.10% and Lumentum Holdings Inc. (LITE) dropped 11.8%.

Super Micro Computer, Inc. (SMCI) fell a similar 11.8%, with the moves looking like profit-taking after enormous year-to-date runs rather than any fresh company-specific catalysts.

Energy was the other soft spot as the Energy Select Sector SPDR Fund (XLE) slid 2.3% alongside crude's drop, though it remains the year's best sector at up 28.3%.

On the corporate front, the J.M. Smucker Co. (SJM) topped the large-cap leaderboard, surging 11.2% after reporting fiscal fourth-quarter adjusted earnings of $2.77 per share, beating the $2.66 consensus, even as revenue of $2.27 billion came in just shy of estimates. DraftKings Inc. (DKNG) rallied 7.9% on its push into prediction markets and supportive analyst commentary, including a UBS price-target hike to $49.

On the downside, SailPoint, Inc. (SAIL) sank 13.6% after the identity-security firm posted a quarterly loss of $0.13 per share against expectations of a small profit, overshadowing a 22% jump in revenue to $280 million.

Elsewhere in deal news, Nuvalent Inc. (NUVL) soared after GSK Plc (GSK) agreed to acquire the lung-cancer drug developer for $10.6 billion, or $124 a share in cash.

Beyond the tape, OpenAI confidentially filed for an IPO after Monday's close – a week after rival Anthropic – while SpaceX is slated to make its market debut Friday in what could be the largest listing on record.

Tuesday's Russell 1000 Top Gainers

Tuesday's Russell 1000 Top Losers