Wall Street began the week with a cautious tone, as a selloff in chipmakers was somewhat balanced by a decline in oil prices. Traders were closely analyzing Treasury Secretary Scott Bessent’s strategy to isolate Iran economically. The S&P 500 fell 0.3% and the Nasdaq 100 dropped 1%, while the Dow Jones Industrial Average saw a 0.3% gain. The MSCI World Index also declined by 0.2%.
Semiconductor stocks experienced a notable slump, especially with Nvidia Corp. facing its seventh consecutive session of declines, its longest such streak since 2022. This occurred just days before its earnings report. A news report indicating that some of Nvidia's major customers were notified of AI-related price hikes exceeding 15% contributed to the sector's unease. An ETF tracking memory shares slipped 5.9%.
Oil prices settled near $85 per barrel after the Treasury chief threatened economic penalties against countries doing business with Iran as part of an "economic D-Day" campaign. This decline in energy costs provided some relief and helped lift Treasury bonds. The yield on 10-year Treasuries decreased by four basis points to 4.70%, while the 30-year Treasury bond yield shed more than four basis points to 5.234%.
Investors are also anticipating Federal Reserve Chair Kevin Warsh’s speech on Friday at the Jackson Hole symposium, where he is expected to clarify the central bank's approach to persistent inflation. Bitcoin's rebound gained momentum, topping $78,000, and Strategy Inc. announced new cash pools for its balance sheet. Alibaba Group Holding Ltd. also raised HK$80 billion ($10.2 billion) in Hong Kong's largest follow-on offering to fund its AI ambitions.
