US stocks resume sell-off; Nasdaq dips over 2%, Dow falls nearly 280 points

US stock markets opened higher on Tuesday, extending gains from the previous session as falling oil prices and renewed enthusiasm around artificial intelligence (AI) stocks lifted investor sentiment. However, the early momentum faded as a rally in chip stocks lost steam, pushing major indices into negative territory.

US equities reversed course despite easing crude prices, with technology shares leading the decline after a strong one-day surge.

The S&P 500 fell 1.3%, while the Nasdaq Composite dropped

2.1%. The Dow Jones Industrial Average slipped 279 points, or 0.6%, as investors weighed the sustainability of the AI-led market rally.

Technology shares continued to lead the market higher, with semiconductor and AI-related stocks building on Monday's rebound after recent weakness in the sector.

Investor sentiment was also supported by a decline in crude oil prices after Israel and Iran paused hostilities. US President Donald Trump said he was confident that a peace agreement could be reached soon, helping ease concerns over potential disruptions to global energy supplies.

West Texas Intermediate (WTI) crude futures fell 5% to trade below $90 a barrel, hovering around $86, after US Energy Secretary Chris Wright said shipping traffic through the Strait of Hormuz was “rising very meaningfully”.

The decline also followed remarks by US President Donald Trump, who said a deal between Washington and Tehran could be reached within “two or three days” and that such an agreement would lead to the Strait of Hormuz reopening “immediately”.

However, Trump warned that renewed military action could result in the closure of the Strait of Hormuz, a key global oil shipping route, for an extended period, highlighting lingering geopolitical risks.

Among individual stocks, Apple shares came under pressure after the company unveiled a range of artificial intelligence and software updates at its annual developers conference. Investors appeared underwhelmed by the announcements, sending the stock down nearly 2.5% in early trade.

The conference also marked the final developers event led by Chief Executive Officer Tim Cook, bringing added attention to the company's future leadership plans.

Most indices in Asia rose Tuesday, with South Korea's KOSPI rebounding strongly to close more than 8% higher. Japan's Nikkei 225 Day and TOPIX also closed higher.

In South Korea, KOSPI heavyweights Samsung Electronics Co. and SK Hynix closed almost 9% and 16% higher, respectively. Among others, shares of LG Energy Solution were up 2% and Samsung SDI Co. over 2%.

OpenAI has confidentially filed for an initial public offering (IPO), adding fresh momentum to the ongoing artificial intelligence rally. The development comes ahead of SpaceX’s market debut on Friday, which is expected to become the largest IPO ever.

While investors see the listing as another boost for the AI-driven market surge, some remain cautious that the blockbuster debut and its reported $1.75 trillion valuation could signal a peak for the current AI boom.

Gold and silver prices declined sharply, with spot gold falling 1.6% to $4,280.30 and spot silver dropping 5% to below $65.