US stocks ended mostly higher on Monday as a significant drop in oil prices, following a pause in attacks between the US and Iran, helped to alleviate inflation worries. The Dow Jones Industrial Average rose by 0.51% or 262.83 points to 52,210.08, and the S&P 500 edged up by 0.016% or 1.20 points to 7,413.18. Conversely, the technology-heavy Nasdaq Composite declined by 0.18% or 43.74 points to 24,932.08, largely due to losses in semiconductor companies.
Oil prices saw a significant fall, with international benchmark Brent crude futures dropping around 11% to approximately $87.60 per barrel and US benchmark West Texas Intermediate settling 9.8% lower at $81.65 per barrel. This decline was attributed to expectations of a diplomatic solution to the US-Iran conflict, reducing concerns over energy supply disruptions. Lower oil prices supported consumer staples and other sectors sensitive to energy costs, but technology shares remained under pressure.
Semiconductor companies experienced notable declines, with AMD falling around 5.2%, Teradyne dropping 4.3%, and Micron Technology losing about 2.3%. Later reports on Tuesday indicated even sharper drops for chip stocks, with Micron down 8.9%, Advanced Micro Devices down 8.1%, and Applied Materials down 7.8%. Analysts suggest these declines were a "knee-jerk reaction" to fears about China's progress in chipmaking equipment capabilities and potential threats to global chipmaking leaders, exacerbating concerns among companies heavily invested in artificial intelligence technology. The market is now looking ahead to major tech earnings reports and the Federal Reserve's interest rate decision on Wednesday.
