US stocks experienced a mixed day on Monday, with the S&P 500 falling 0.3% and the Nasdaq Composite declining 0.71% to 0.8%. This downturn was primarily driven by weakness in the technology sector, as investors grew cautious ahead of Nvidia's quarterly financial report. Despite these tech-led losses, the Dow Jones Industrial Average managed to rise by 0.17% to 0.3%, gaining 89.04 to 140.15 points, and the majority of stocks within the S&P 500 actually saw gains.
Technology stocks were particularly impacted, with Nvidia sinking 2.9% to 2.91% and being the heaviest weight on the S&P 500. Other semiconductor-related stocks also saw significant drops, including Micron Technology by 5.8% to 5.83%, Broadcom by 2.6%, Intel by 3.12%, and SanDisk by 6.45%. This caution reflects ongoing worries that the high valuations in AI technology might not be sustainable if the demand for AI chips doesn't translate into sufficient profits. The Philadelphia Semiconductor Index consequently fell by 2.70%.
Conversely, falling oil prices and declining US Treasury yields provided some support to the broader market. Brent crude fell 1.83% to 2.3% per barrel, settling at $90.54 to $92.65, while US crude (WTI) dropped 2.35% to $85.00 to $85.01 a barrel. The yield on benchmark US 10-year notes decreased by 3.99 basis points to 4.698% to 4.70%, and the 30-year bond yield fell 4.94 basis points to 5.2266% to 5.234%. This dip in yields followed reports that the Treasury Department might use its cash account to finance increased debt buybacks, although some analysts, like those from Goldman Sachs and Wells Fargo, caution that such measures might only offer temporary relief without addressing fundamental economic issues.
Other notable market movements included a dip in the Canadian dollar by 0.48% against the US dollar to C$1.383 due to looming US trade war tensions. The dollar index, which measures the greenback against a basket of currencies, rose 0.15% to 98.96. Gold prices surged to their highest levels in over three months, with spot gold rising 1.53% to $4,673.16 an ounce and US gold futures up 1.01% to $4,670.90 an ounce, driven by the Treasury's buyback announcement and a weaker dollar. Investors are also keenly awaiting Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole conference later in the week for guidance on bond yields and monetary policy.
