Technology shares led a market downturn that brought Wall Street’s historic winning streak to an end Tuesday, as artificial intelligence companies faced selling pressure and energy costs climbed.
The S&P 500 retreated 0.2% from Monday’s record close, while the Dow Jones Industrial Average managed a slight 0.1% gain. The tech-heavy Nasdaq fell 0.7% after reaching its own peak just one day earlier. Companies that had surged during the artificial intelligence rally became the session’s biggest drags on market performance.
The selloff started in Asian markets, where South Korea’s main index plummeted 2.3% amid speculation that officials might redistribute unexpected AI-related profits to the public. Meanwhile, crude oil jumped more than 3% as ongoing conflict with Iran raised supply concerns.
President Donald Trump is scheduled to arrive in Beijing Wednesday for high-level talks with Chinese President Xi Jinping. Trump told the press that trade negotiations will dominate their agenda, with his administration hoping to create a “Board of Trade” mechanism to resolve disputes and avoid future commercial tensions. The diplomatic mission occurs as Trump faces domestic challenges from the Iran conflict and climbing inflation rates. Discussions will also cover Taiwan policy and an $11 billion arms deal, with Trump expressing confidence about improving U.S.-China relations.
Several major American business leaders have received invitations to accompany Trump on his China visit. The delegation includes technology, farming, and defense industry executives such as Apple’s Tim Cook, Goldman Sachs chief David Solomon, and Tesla and SpaceX leader Elon Musk. Beyond Iran-related discussions, Trump and Xi plan to address trade policies and artificial intelligence cooperation.
Hotel industry representatives report that anticipated economic benefits from World Cup hosting have yet to materialize. The American Hotel & Lodging Association’s latest analysis shows reservation levels falling short of projections in most of the 11 American host cities, with approximately one month remaining before the global tournament begins. Survey data indicates that nearly 80% of hotels in Boston, Philadelphia, San Francisco, and Seattle are experiencing slower booking patterns compared to typical summer periods. Industry analysts suggest operators should have anticipated the lukewarm demand.
Trump has proposed suspending federal gasoline taxes to help consumers cope with elevated fuel costs during the Iran crisis. While the president lacks unilateral authority for such action, legislators from both parties are already advocating for the temporary measure. Proponents argue the suspension would benefit struggling households and businesses, though critics note the tax represents only a small fraction of pump prices and question its effectiveness. The federal fuel tax supports highway and transit infrastructure, raising concerns about long-term funding implications if suspended.
OpenAI leader Sam Altman appeared in court Tuesday to defend his business practices in a legal battle with Elon Musk, countering testimony that criticized his management during a crucial period for the ChatGPT developer. Musk, currently the world’s wealthiest individual, seeks Altman’s removal from company leadership through a civil case alleging betrayal of their original OpenAI mission. Altman’s testimony outlined various worries about Musk’s efforts to increase his influence over OpenAI, which aims to develop artificial general intelligence that surpasses human capabilities.
Global shipping companies warn of potential fuel shortages as the Iran war disrupts a critical supply route through the Strait of Hormuz. Maritime transport handles roughly 80% of international trade, relying on a thick, oil-based substance called bunker fuel for propulsion. Southeast Asia serves as the world’s primary ship refueling center, placing the region at the heart of mounting supply concerns as costs soar. Industry experts advise businesses and consumers to prepare for shipping cost increases and profit margin impacts, while interest in environmentally friendly fuel alternatives may accelerate.
Marty Makary has stepped down from his role leading Trump’s Food and Drug Administration following criticism from pharmaceutical companies, anti-abortion groups, and other administration supporters. The surgeon and researcher faced difficulties during his tenure, with Trump acknowledging Tuesday that Makary “was having some difficulty” but would “go on and do well.” Makary gained recognition as a vocal opponent of COVID-19 public health policies through Fox News appearances, but struggled to earn staff trust at the FDA amid workforce reductions, management changes, and disputes over vaccines, medications, and e-cigarettes.
Kuwait has accused Iran of attempting an unsuccessful assault on an island where China is constructing port facilities. The allegation emerged Tuesday as Trump prepared to depart for Beijing to meet with Xi Jinping for critical discussions about the war and other matters. Kuwaiti officials said six armed Revolutionary Guard members tried to infiltrate Bubiyan Island for “hostile acts,” with four detained and two escaping. Iran has not responded to Kuwait’s claims. With ceasefire negotiations between Iran and the United States stalled, continued attacks risk renewed full-scale conflict.
American consumer prices accelerated again last month as the 10-week Iran conflict drove energy costs higher. The Labor Department announced Tuesday that its consumer price index increased 3.8% compared to April 2025, with monthly prices rising 0.6% from March as gasoline jumped 5.4%. Core prices excluding food and energy climbed 0.4% monthly and 2.8% annually, suggesting the energy price surge hasn’t significantly spread to other categories.
