Wall Street ends mixed as tech sell-off offsets U.S.-Iran peace optimism

U.S. stock markets closed mixed on Monday, June 22, as a sharp sell-off in major technology stocks offset gains from encouraging developments in U.S.-Iran peace negotiations. The Dow Jones Industrial Average rose 0.29 percent to 51,712.71, while the S&P 500 fell 0.37 percent to 7,472.79 and the Nasdaq Composite Index dropped 1.32 percent to 26,166.6.

SpaceX plunged 16.43 percent after confirming its first-ever bond sale, marking its third consecutive session of losses. Other major technology stocks including Alphabet, Amazon, Meta Platforms, and Nvidia also declined. The sell-off extended into after-hours trading, with Nasdaq 100 futures sliding 2.1 percent on Tuesday morning.

Analysts pointed to growing concerns about returns on massive AI investments as a key factor behind the tech weakness. "The issue that stands out the most is the idea that the hyperscalers continue to receive an extremely low return on investment on their colossal level of spending on AI," said Matt Maley, chief market strategist with trading firm Miller Tabak. He also highlighted worries about "circular investments" where companies invest in and do business with each other.

However, some chipmakers bucked the trend ahead of upcoming earnings. Micron Technology rose 6.82 percent, Advanced Micro Devices gained 2.65 percent, and Intel advanced more than 5 percent. Investors are now looking ahead to Micron's earnings on Wednesday and the release of May's personal consumption expenditures price index on Thursday.

On the geopolitical front, progress in U.S.-Iran peace talks boosted sentiment in other sectors. Iran stated on Monday that there had been "encouraging progress" in talks held in Switzerland and agreed to a roadmap for a final deal within 60 days. The U.S. issued a 60-day waiver allowing the sale of some Iranian oil and petroleum products, citing "productive talks."

Positive diplomatic signals drove oil prices lower, with West Texas Intermediate crude for July delivery falling 2.32 percent to $74.82 per barrel and Brent crude for August delivery declining 3.31 percent to $77.90 per barrel. The energy and real estate sectors were the best performers, rising 1.24 percent and 1.38 percent respectively, while communication services and consumer discretionary led the declines.