Dow slides 537 points as rising oil prices rattle AI-fueled rally

• Semiconductor stocks led declines with the sector falling 4%, as Nvidia, AMD, and Intel sold off following weeks of AI-fueled gains; 10-year Treasury yields hit their highest level since May 2025
• Oil prices jumped 3% on escalating Iran tensions and Trump's warnings, with WTI crude reaching $104 and Brent at $108, raising concerns about persistent inflation and increasing odds of a Fed rate hike in December
• The Trump-Xi summit disappointed investors with limited breakthroughs on trade and Iran policy; China's agreement to purchase 200 Boeing aircraft fell short of market expectations

Market Summary: Major Indices Decline on Oil Surge and Rising Yields

Key Market Movements:

U.S. equities experienced significant losses on May 15, 2026, with the Dow Jones falling 537 points (-1.1%), the S&P 500 declining 1.2%, and the Nasdaq dropping 1.5%. This selloff occurred despite the Dow reclaiming 50,000 and the S&P 500 crossing 7,500 for the first time just a day earlier.

Primary Catalysts:

Rising oil prices drove market concerns, with WTI crude surging 3% to approximately $104/barrel and Brent crude reaching $108. The increase followed escalating Middle East tensions involving Iran, with President Trump warning he would "not be much more patient" with the country. Treasury yields climbed sharply, with the 10-year hitting its highest level since May 2025 and the 30-year exceeding 5.1%, reflecting renewed inflation concerns.

Sector Performance:

Technology and semiconductor stocks led declines, falling 3% and 4% respectively. Major chipmakers including Nvidia, AMD, Intel, and Micron all dropped as AI-related momentum cooled. Cerebras Systems, which debuted with a 68% surge Thursday, retreated 4%. Microsoft was a notable exception, posting gains.

Policy Developments:

The Trump-Xi summit disappointed investors, failing to deliver meaningful progress on trade, tariffs, or semiconductor policy. China's commitment to purchase 200 Boeing aircraft fell short of expectations, pressuring the stock.

Market Outlook:

CME FedWatch data shows sharply increased probability of a 25-basis-point Fed rate hike in December as inflation fears mount. Investors rotated toward safer assets amid concerns about persistent inflation driven by elevated energy prices.