On July 7 (local time), the three major U.S. stock market indices closed lower across the board. As concerns over the high valuation of artificial intelligence (AI)-related stocks resurfaced, compounded by geopolitical risks surrounding the Strait of Hormuz between the United States and Iran, investors' risk-averse sentiment strengthened.

The Dow Jones Industrial Average fell 130.76 points (0.25%) from the previous session to close at 52,925.15. The S&P 500 index declined 33.58 points (0.45%) to 7,503.85, while the Nasdaq Composite Index plunged 302.47 points (1.16%) to finish at 25,818.69. The Nasdaq, which is heavily weighted with tech stocks, recorded the steepest decline among the three indices.

The Wall Street Journal (WSJ) pointed to two factors behind the decline. First is valuation concerns over AI-related stocks. Analysts noted that Samsung Electronics' earnings announcement served as a catalyst that reignited caution over the AI investment frenzy. Second, investor sentiment contracted as military tensions between the U.S. and Iran surrounding the Strait of Hormuz came back into focus. The fact that the Nasdaq's decline was particularly sharp suggests that profit-taking and revaluation pressures on AI tech stocks, which had been driving the market rally, were at the core of this correction.

[This article was written with the assistance of AI. This article does not constitute investment advice, and any losses resulting from asset investments are the sole responsibility of the investor.]