Yesterday, stock indices ended mixed. The S&P 500 fell by 0.17%, while the Nasdaq 100 declined by 0.83%. The Dow Jones Industrial Average, however, gained 0.49%.

The MSCI All Country World Index snapped a five-day winning streak, dropping by 0.2% as semiconductor stocks in Asia and the US retreated, underscoring investor caution toward the sector. The key Asian equity index fell by 1.2%, while sentiment across other markets remained more stable.

Memory maker Sandisk plunged by 8% in after-hours trading, while competitor Western Digital tumbled by 12% following earnings reports from both companies. The semiconductor sector was also in focus in Asia, with the Kospi, serving as a barometer for AI investments, dropping by 4.8%, led lower by SK Hynix and Samsung Electronics. Kioxia lost 9.7% in Tokyo.

Gold, meanwhile, rose by 0.4% to $4,265 per ounce, its strongest level since June, on expectations that the reopening of the Strait of Hormuz and lower oil prices would ease pressure on the Federal Reserve to raise rates, which typically diminishes the appeal of non-yielding precious metals. Brent crude fell by 0.3% to around $79.20 per barrel after Iran announced an agreement with Oman on a proposed shipping route through the strait, potentially paving the way toward its full reopening.

The pause in the tech-led rally comes as investors reassess overheated valuations after AI stocks rebounded from last month's sell-off. However, the scale of prior volatility in the chip sector remains significant for context. The MSCI World Semiconductor Index plunged by more than 20% from its June peak on concerns over the sustainability of the AI spending boom and China's progress in advanced chip manufacturing, before recovering by roughly 15%.

A separate focus of the day was Federal Reserve Governor Lisa Cook, who warned that the longer inflation remains above the central bank's target, the harder it will be to rein in, and expressed readiness to act if inflation fails to decelerate.

Regarding the S&P 500 technical picture, the main task for buyers today will be to overcome the nearest resistance level of $7,737. This would help drive gains and open the possibility of a push toward $7,756. Equally important for bulls will be maintaining control above $7,774, which would strengthen buyers' positions. In case of a downside move amid reduced risk appetite, buyers must defend the $7,718 area. A break below that level would quickly push the instrument back to $7,698 and open the path toward $7,679.