US stocks finished mixed on Monday. The Dow Jones Industrial Average rose 262.83 points, or 0.51%, to 52,210.08, and the S&P 500 added 1.2 points, or 0.02%, to 7,413.18. The Nasdaq Composite Index, however, shed 43.74 points, or 0.18%, to 24,932.08. This mixed performance was attributed to conflicting market forces: plunging oil prices and a sell-off in the semiconductor sector.
The decline in oil prices was significant, with West Texas Intermediate crude for September delivery plunging $6.70, or 7.5%, to settle at $82.61 a barrel, and Brent crude for September delivery dropping $8.42, or 8.7%, to close at $88.36 a barrel. This sharp drop was largely due to a temporary pause in military hostilities between the United States and Iran, easing concerns about global oil supplies. The sustained pullback in oil prices is expected to ease near-term cost pressures ahead of the Federal Reserve's upcoming interest rate decision on Wednesday, where officials are widely anticipated to maintain target rates at current levels.
Conversely, chip stocks experienced a widespread retreat. Nvidia tumbled 4.99%, while Advanced Micro Devices and Teradyne dropped over 5% and over 4% respectively. Micron Technology shed 2.25%. This sell-off was fueled by escalating concerns over circular financing within the AI ecosystem and a rising competitive threat from China's semiconductor manufacturing sector, particularly after memory chipmaker ChangXin Memory Technologies (CXMT) soared more than 500% on its market debut in Shanghai, reaching an estimated market capitalization of nearly $490 billion.
Investor attention this week will also focus heavily on the busiest period of the second-quarter corporate reporting cycle, with roughly one-third of S&P 500 components scheduled to release financial disclosures. Key interest 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. Chris Larkin, head of trading and investing at E*TRADE from Morgan Stanley, noted that geopolitics, oil prices, and Big Tech earnings, along with the Federal Reserve's stance on interest rates, present significant potential surprises for the market this week.
