The Biggest Things Driving the Nasdaq Lower Today: Iran Blockade Rattles Tech
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Invesco QQQ Trust (QQQ) slipped 0.34% in early Monday trading after U.S.-Iran peace talks collapsed and President Trump ordered a naval blockade of the Strait of Hormuz, sending West Texas Intermediate crude above $100 per barrel and hammering growth-sensitive tech stocks. Software stocks experienced their worst sentiment in years with hedge fund exposure down to 1.4% of total U.S. net exposure, while semiconductor stocks proved more resilient with 17 new all-time highs this year.
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QQQ faces a critical test of how much geopolitical shock the market will absorb, with Q1 earnings season beginning this week and the trajectory of Iran-U.S. diplomacy becoming the single most important variable for the Nasdaq.
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The NASDAQ Composite (^IXIC) opened Monday under pressure, slipping 0.34% in early trading after 21 hours of U.S.-Iran peace talks over the weekend collapsed without a deal. President Trump ordered a naval blockade of the Strait of Hormuz, effective 10 a.m. ET Monday, sending oil prices surging and rattling growth-sensitive tech stocks. The session tests how much geopolitical risk the market will absorb before the broader selloff deepens. The NASDAQ Composite (^IXIC) is destined for a wild ride this week as the US / Iran conflict seems destined for another round of on-again, off-again diplomacy.
Talks stalled over two irreconcilable demands: the U.S. insisted Iran give up its nuclear program entirely, while Iran demanded control over traffic through the Strait of Hormuz. Trump moved immediately to the blockade option. Iran’s National Security Commission spokesman called the blockade “an act of war,” and warned that no port in the Persian Gulf or Sea of Oman would be safe.
The energy market is pricing in the disruption. OPEC crude oil production plunged in March to 20.79 million barrels a day, a decline of 7.89 million barrels, with OPEC+ output falling to 35.05 million barrels a day as the Strait of Hormuz closure took effect. West Texas Intermediate crude climbed back above $100 per barrel Monday morning, extending a month-long surge. WTI had traded at about $81 in early March before climbing to roughly $114 by early April, a level that sits at the 99.6th percentile of the past year’s range.
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Damage inside the Nasdaq is not uniform. Software stocks are experiencing their worst sentiment in years, with hedge fund net exposure to software down to just 1.4% of total U.S. net exposure, from 7% at the start of the year. Semiconductor stocks have been relatively resilient, posting 17 new all-time highs this year and outperforming software by more than 15% over the past five trading days, the largest such spread in over 25 years.
Fair Isaac (NYSE:FICO) fell roughly 14% on Friday after Barclays cut its price target, adding pressure from regulatory scrutiny over credit score pricing. That move came before the Iran headline, leaving it facing both regulatory and geopolitical headwinds at the open.
The selloff extends beyond the Nasdaq. S&P 500 futures fell 0.6% in Monday morning trading, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) was down 0.33% in early trading. The SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) dropped 0.74%, the steepest early decline among major index proxies. Small caps, tracked by the iShares Russell 2000 ETF (NYSEARCA:IWM), were off 0.33%, roughly in line with the S&P 500.
The VIX closed Friday near 19, down from a recent peak above 31. That places it in the normal range, suggesting the market treats the geopolitical shock as serious but not yet catastrophic. The 10-year Treasury yield held near 4.3%, essentially unchanged on the week, reflecting measured repositioning in bonds.
Software valuations depend heavily on stable growth expectations and cheap capital. A sustained oil shock raises inflation, which pressures the Fed and raises the discount rate applied to future earnings. Semiconductor stocks, tied more directly to physical supply chains and AI hardware demand, prove more resilient to that pressure.
Consumer confidence deteriorates in the background. 54% of consumers in April said their financial situation is worse compared to a year ago due to higher prices, up from 47% in March, the highest reading on record. That backdrop makes any further oil-driven inflation especially damaging for consumer-facing tech businesses.
Q1 earnings season begins this week, with major bank results from JPMorgan Chase, Wells Fargo, and Citigroup providing the first hard data on how the economy entered 2026. Expectations call for another quarter of double-digit earnings growth, but guidance cuts tied to energy costs or geopolitical uncertainty could accelerate the tech selloff. The trajectory of Iran-U.S. diplomacy, and whether the blockade escalates or opens a path back to negotiations, is the single most important variable for the Nasdaq this week.
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