Tech stocks fell on Monday after President Donald Trump announced the restoration of a blockade on Iranian ports, marking the latest escalation in US-Iran rivalry. The move led to a sharp rise in oil prices and reduced overall risk appetite.

Investors now in the U.S. Federal Reserve Chairman Kevin Warsh is gearing up for a busy week of earnings, economic data and congressional testimony. Among the three major indexes, losses were led by the tech-heavy Nasdaq, followed by the S&P 500, while gains in energy stocks tracking a rise in crude prices due to restricted traffic through the Strait of Hormuz caused the Dow to fall.

“Stocks really hit a high in late May, driven primarily by semiconductors,” said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. “When you move something that far, that fast, you invite the question of how sustainable it is. If the market was cheap, that would be one thing. Now there’s less of a cushion and a lot of unknowns.”

Amid sustained AI-driven momentum in recent months, chip stocks have led both rallies and selloffs. The Philadelphia Semiconductor Index underperformed sharply, with losses led by SanDisk, Marvell Technologies and Western Digital. US-listed shares of South Korean chipmaker SK Hynix also fell after rising more than 12% during the Nasdaq open on Friday.

Over the weekend, the US and Iran exchanged heavy airstrikes, raising tensions significantly and prompting Trump to revive a blockade on Iranian ports. The development raised concerns about stalled peace talks and sent crude prices up 9.4%, on fears that supply disruptions could lead to continued inflationary pressures.

Warsh is scheduled to give his first semiannual testimony before Congress on Tuesday and Wednesday, where he is expected to address the inflationary implications of the conflict and outline the Fed’s policy outlook. According to LSEG data, markets are currently pricing in at least one 25 basis point rate hike by the end of the year.

Key economic data this week include the Consumer Price Index and Producer Price Index from the Labor Department, which will provide insight into inflation trends in June amid geopolitical volatility. The Commerce Department’s retail sales data will also provide clues on consumer resilience, as consumption accounts for roughly 70% of the US economy.

According to preliminary data, the S&P 500 fell 60.21 points, or 0.79%, to close at 7,515.18. The Nasdaq Composite fell 408.83 points, or 1.56%, to 25,872.77, while the Dow Jones Industrial Average lost 129.16 points, or 0.25%, to 52,507.85.

Major US banks including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo are set to report quarterly earnings on Tuesday, marking the unofficial start of the second-quarter earnings season.

“I wonder if the market will start to push back against an increase in corporate issuance to fund AI capex, which has been under scrutiny for some time now,” said Ross Mayfield, investment strategy analyst at Baird. “It will be important to see how banks position themselves in corporate bonds and fixed income.”

Analysts currently expect overall second-quarter earnings growth of 23.7% annually for the S&P 500, up from 19.2% estimated in early April, according to LSEG.