US stocks closed mixed on Monday, July 27, 2026, with the Dow Jones Industrial Average rising by 262.83 points (0.51%) to 52,210.08, and the S&P 500 gaining a marginal 1.2 points (0.02%) to 7,413.18. In contrast, the tech-heavy Nasdaq Composite Index shed 43.74 points (0.18%) to close at 24,932.08. This divergence was largely due to a significant retreat in semiconductor stocks, which weighed on the Nasdaq, while other sectors, including consumer staples and communication services, saw gains.
The downturn in chip stocks was primarily fueled by escalating concerns about circular financing within the AI ecosystem. Nvidia led the decline, tumbling 4.99%, while peer semiconductor firms Advanced Micro Devices and Teradyne dropped more than 5% and more than 4% respectively. Micron Technology also saw a 2.25% decrease. These declines were a key factor in the Nasdaq's fall, with the iShares Semiconductor ETF (SOXX) down more than 3% to a one-week low.
On the other hand, a sharp decline in oil prices provided some counterbalance to the market. West Texas Intermediate crude for September delivery plunged $6.70 (7.5%) to settle at $82.61 a barrel, and Brent crude for September delivery dropped $8.42 (8.7%) to close at $88.36 a barrel. This plunge was attributed to easing geopolitical tensions between the United States and Iran, with a temporary pause in military hostilities and renewed negotiations. The sustained pullback in oil prices is expected to ease near-term cost pressures, ahead of the Federal Reserve's anticipated decision to maintain interest rates at current levels this Wednesday.
Investors are also bracing for a busy week of second-quarter corporate earnings, with roughly one-third of S&P 500 components scheduled to release financial disclosures. Key attention will be on capital expenditure guidance and AI monetization metrics from mega-cap technology leaders like Microsoft, Meta Platforms, Apple, and Amazon, especially following aggressive infrastructure spending updates from Alphabet and Tesla earlier in the month. Meanwhile, software stocks saw a rally, with Workday up over 8% and Salesforce gaining more than 4%, buoying the Dow. Chris Larkin, head of trading and investing at E*TRADE from Morgan Stanley, noted the potential for surprises this week, including strong Mag-7 earnings, but cautioned that a bullish response isn't guaranteed if AI spending continues to raise eyebrows.
