Stocks drop after Trump reimposes Strait of Hormuz blockade, SK Hynix leads chip stocks lower: Live updates

Stocks fell on Monday after President Donald Trump announced he was reinstating what he called a blockade on Iranian shipping through the Strait of Hormuz.

The S&P 500 lost 0.7%, while the Nasdaq Composite was down 1.5%. The Dow Jones Industrial Average traded down 139 points, or 0.3%.

“We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving,” Trump said in a post on Truth Social.

“The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’ but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World,” he continued.

Oil prices jumped following his announcement, with U.S. West Texas Intermediate futures rising more than 7% to top $76. Brent crude futures, the international benchmark, advanced 7% to above $81 per barrel.

The latest escalation came after Iran and the U.S. exchanged airstrikes over the weekend. Tehran targeted U.S. facilities in several Gulf countries and declared the Strait of Hormuz closed, though Trump disputed that claim on Sunday, saying the key shipping lane remained open to commercial traffic.

Trump on Saturday ordered airstrikes on Iran after Tehran attacked a commercial vessel transiting the strait.

“It’s a range-bound market until you get a true solution in the Middle East,” said Ben Fulton, CEO of WEBs Investments.

Semiconductor names were under pressure. U.S.-listed shares of SK Hynix lost 6% following the South Korean chipmaker’s Nasdaq debut on Friday, when it soared 13%.

Shares in Micron Technology were down 5%, while shares of Sandisk shed 12%. Seagate Technology fell 6%. Elsewhere, Advanced Micro Devices was 3% lower, while Intel pulled back 6%.

“I feel like some of the shift has gotten ahead of itself,” Fulton also said, adding that he still thinks the AI trade is ultimately “alive and well.”

Additionally, shares of major U.S. banks — namely, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo — were lower ahead of their earnings results this week. Quarterly results from Netflix, Johnson & Johnson and UnitedHealth are also on deck.

Expectations for the season are high. On average, analysts estimate that second-quarter S&P 500 profits grew by more than 23% year over year, per FactSet.

On Tuesday, the June CPI report is due out in the morning. Economists polled by Dow Jones are expecting the headline reading to show a 0.2% decline on the month but a year-over-year increase of 3.8%.

Federal Reserve Chairman Kevin Warsh is also slated to appear before the House Financial Services Committee Tuesday, offering testimony on the central bank’s semi-annual monetary policy report.

— CNBC’s Yun Li contributed reporting.