US stocks experienced a mixed day. The Nasdaq 100 climbed to its first record since June, propelled by a rally in chipmakers, with a closely watched measure of semiconductor powerhouses like Micron Technology Inc. and Nvidia Corp. extending their gains for a sixth consecutive day. The S&P 500 was little changed, while the Dow Jones Industrial Average fell 0.4%. Financials and energy sectors lagged, weighing on the S&P 500's overall performance, while materials, staples, and healthcare were among the best-performing sectors. AI-linked stocks were mixed, though Microsoft Corp. rose 0.9% in premarket trading. David Kruk, head of trading at La Financiere de l'Echiquier, noted that he didn't foresee shorting tech and AI before the third-quarter earnings season. Alibaba Group Holding Ltd. also announced a new AI chip. On Holding AG plans to increase constant currency sales at a high teens rate through 2029.
Oil prices fluctuated throughout the day. Brent crude initially fell below $98 per barrel, but later trimmed losses to settle around $99.25, down 1.1%. West Texas Intermediate crude fell 1.2% to $94.59 a barrel. This volatility was influenced by diplomatic efforts to end the US-Iran war and reports that Iran proposed reopening Hormuz within seven days if the US blockade was lifted. The easing of oil prices helped to alleviate some fears regarding inflationary risks from high energy costs.
In the bond markets, Treasury yields turned lower, with the 10-year rate declining two basis points to 4.93%. However, despite lower crude prices, US yields were largely unchanged as money markets anticipate a further 25 basis points rate hike in 2026. Fed voter Collins projected rates to remain on hold through 2027, while Barkin indicated last week's hike would aid price stability, but further hikes might be necessary.
The dollar strengthened against other major currencies. The Bloomberg Dollar Spot Index was little changed, but the dollar saw overall strength. The euro was little changed at $1.1466 and then fell 0.1% to $1.1451. The British pound was little changed at $1.3365 and then fell 0.2% to $1.3345. The Japanese yen rose 0.2% to 157.04 per dollar and was later little changed at 157.39 per dollar. Precious metals, including gold, rallied on broader risk-on sentiment, with spot gold rising 0.4% to $4,361.33 an ounce.
