Nasdaq Selloff Deepens as Oil Rises and FOMC Looms

29.07.2026 · By Bernal Fintech Markets Desk

The Nasdaq, S&P 500, and Dow indices all fell sharply on Monday as oil prices surged amid escalating tensions involving Iran and the Federal Reserve’s upcoming policy decision. The selloff was exacerbated by continued losses in semiconductor stocks, which have shed over $1 trillion in market value since Friday. Chipmakers such as Nvidia, SK Hynix, and Samsung Electronics led the decline, with investors growing increasingly wary of the AI-driven tech sector.

Oil prices climbed to multi-week highs as geopolitical tensions with Iran intensified, adding to market volatility. The situation was further complicated by the looming FOMC meeting, where the Federal Reserve is expected to make a decision on interest rates. The uncertainty surrounding the Fed’s policy stance has heightened investor anxiety, contributing to the broader market decline.

Chip Sector Under Pressure

The semiconductor industry has been under significant pressure, with chip stocks experiencing a steep decline. This selloff has been driven by a combination of factors, including rising oil prices, which have increased input costs for manufacturers, and the anticipation of a potential rate hike by the Federal Reserve. Companies like Sandisk and Micron Technology saw premarket declines, with investors losing confidence in the sector’s ability to sustain growth amid these challenges.

Analysts have noted that the AI boom, which had previously fueled strong demand for semiconductor stocks, is showing signs of cooling. The sharp declines in tech shares have raised concerns about the sustainability of the AI-driven investment trend. As a result, many investors are reassessing their positions in the sector, leading to a broader market correction.

What it means for markets

The combination of rising oil prices, geopolitical tensions, and the uncertainty surrounding the Fed’s policy decisions has created a volatile environment for global markets. Investors are closely watching the FOMC meeting for any signals on interest rates, which could influence the direction of the stock market and the broader economy.