Dow turns red as chip stocks tumble, oil prices gain

The Dow Jones Industrial Average pulled back from record levels on Tuesday as investors once again appeared to rotate out of names tied to artificial intelligence and as oil prices advanced.

The 30-stock index traded down 168 points, or 0.3%, after earlier hitting a new all-time intraday high. The S&P 500 and Nasdaq Composite fell 0.3% and 0.7%, respectively.

Shares of Micron were last seen 5% lower, with KLA, Marvell Technology, Broadcom and AMD also posting declines. The VanEck Semiconductor ETF (SMH) fell more than 3%.

“Expectations are up, and fundamentals are struggling to meet these high sky-high demands, and that’s what’s fueling today’s decline,” said Mike Bailey, director of research at FBB Capital Partners. “I would expect the rotations that we’ve seen to continue.”

Investors moved into key names in other areas of the market such as healthcare, financials and Big Tech. Shares of Eli Lilly gained 2%, while JPMorgan Chase and Microsoft also saw gains. Walmart shares added almost 1% on the heels of the company announcing price cuts on products such as ground beef and Coca-Cola.

Adding to the downbeat sentiment, oil prices rose after Iran attacked a Qatari liquefied natural gas tanker near the Strait of Hormuz. International benchmark Brent crude futures were more than 2% higher, trading above $74 per barrel. U.S. West Texas Intermediate futures gained more than 2% to above $70.