* Technology stocks slump, S&P 500 index falls 1.39%;

* Interest rate cut expectations solidify, medium to long-term U.S. Treasury yields continue to decline;

* International oil prices stabilize and rebound, U.S. crude oil inventories decrease for the third consecutive week.

On Wednesday, the U.S. stock market's chip sector faced significant headwinds as geopolitical risks dampened risk appetite, dragging down the Nasdaq and S&P 500 indices, while sectors such as finance and energy propelled the Dow Jones Industrial Average to new highs. At the close, the Dow Jones Industrial Average rose by 243.60 points, or 0.59%, to 41,198.08, the Nasdaq Composite fell by 2.77% to 17,996.92, marking the largest single-day drop in 18 months, and the S&P 500 index fell by 1.39% to 5,588.27. The VIX, a measure of market volatility, briefly touched a six-week high before closing up 9.8%.

In terms of individual stocks, Nvidia, TSMC, and Qualcomm fell by over 6%, leading to a $480 billion evaporation in the market value of the chip sector.

Star technology stocks were generally under pressure, with Microsoft down 1.3%, Google down 1.6%, Apple down 2.5%, Amazon down 2.6%, and Meta down 6.8%.

Johnson & Johnson rose by 3.7%, benefiting from strong pharmaceutical sales, with the company's financial report showing both revenue and earnings that exceeded market expectations.

Eli Lilly fell by 3.8%, following the release of early data on an experimental obesity treatment drug by Swiss competitor Roche.

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The semiconductor sector performed poorly, with rumors of a new round of U.S. government export controls sparking market panic, causing the Philadelphia Semiconductor Index to plunge by over 7% at one point.

Michael Green, Chief Strategist at asset management firm Simplify Asset Management, said: "(The sell-off) was driven by pressure in the chip sector, and we saw it then extend to small-cap stocks." After five consecutive Fridays of gains, the Russell 2000 index fell by 1.1% on Wednesday.Adam Sarhan, founder and CEO of 50 Park Investments, leans towards this being a short-term impact. "Whether large tech companies can maintain their leading position will depend on earnings. Pullbacks are healthy, giving the market a chance to reset and providing buyers with an opportunity to emerge and purchase at better prices."

Market Overview

The US Department of Commerce reported that industrial production increased by 0.6% in June, better than market expectations. Meanwhile, US new home starts and building permits unexpectedly rose in June, as strength in multi-unit projects offset the decline in single-family home construction.

Federal Reserve Governor Waller stated on Wednesday that the timing for a rate cut is "getting closer," but he still hopes for more evidence that inflation is slowing down before preparing to take action. "I believe the current data is consistent with achieving a soft landing, and I will look for data in the coming months to support this view. Therefore, while I do not believe we have reached our final destination, I do believe we are getting closer to the time when we need to lower the policy rate."

The Federal Reserve released the Beige Book, showing that economic activity in the United States is expanding at a moderate pace, but there are signs that the labor market continues to weaken. Chuck Carlson, CEO of Horizon Investment Services, believes that the economy appears to be on a path to a soft landing, so let's buy stocks that are sensitive to the economy.

In the long-term US Treasury market, yields fell, with the 2-year Treasury note, closely linked to interest rate expectations, falling 2.0 basis points to 4.42%, and the benchmark 10-year Treasury note falling 2.5 basis points to 4.14%. The federal funds rate indicates that a rate cut in September is fully priced in.

In the commodity market, international oil prices stabilized and rebounded, with US crude oil inventories falling for the third consecutive week. The near-month WTI crude oil contract rose by 2.59%, to $82.85 per barrel, and the near-month Brent crude oil contract rose by 1.61%, to $85.08 per barrel.

International gold prices surged and then fell back, with the COMEX gold futures for delivery in July on the New York Commodity Exchange falling by 0.31%, to $2,454.80 per ounce.