U.S. equity markets closed with a mixed performance on Monday, as a recovery in semiconductor stocks helped offset broader caution ahead of a packed week of corporate earnings. The Dow Jones Industrial Average declined 297 points, or 0.57%, to 51,848.96, while the S&P 500 slipped 0.18% to 7,444.19. The Nasdaq Composite edged down just 0.04% to 25,510.27, after briefly trading in positive territory during the session.
Geopolitical Tensions Keep Markets on Edge
Investor sentiment remained fragile amid ongoing U.S. military strikes on Iran, now in their ninth consecutive day. However, reports of continued backchannel communications with Tehran offered a glimmer of hope for diplomatic resolution. Meanwhile, Yemen’s Iran-aligned Houthi group announced a naval blockade on Saudi Arabia, heightening concerns over global energy supplies and shipping routes through the Red Sea.
Oil prices stayed elevated, with U.S. crude trading near $83 per barrel and Brent crude hovering around $89. The market continues to assess the potential disruption to the Strait of Hormuz, a critical chokepoint for global oil shipments.
Semiconductor Stocks Rebound Ahead of Major Earnings
Chipmakers staged a recovery after last week’s sharp selloff, which had pushed the Philadelphia Semiconductor Index into bear market territory—more than 20% below its late-June record high. Micron Technology rose over 1%, Astera Labs gained more than 2%, Teradyne advanced about 3%, and Advanced Micro Devices added roughly 2%. The VanEck Semiconductor ETF also posted a modest gain.
Investors are now turning their attention to upcoming earnings from Intel and Texas Instruments for signs that demand across the semiconductor sector remains resilient. The broader second-quarter earnings season accelerates this week, with Alphabet, Tesla, and Intel among the major technology companies scheduled to report. According to LSEG data, analysts now expect S&P 500 companies to post year-over-year earnings growth of 26% for the quarter, up from an earlier estimate of 23.7%.
Alphabet Gains on AI Chip Development
Alphabet shares rose following reports that Google is developing a new server chip integrated with its Gemini AI model. The project aims to improve AI efficiency and reduce computing constraints by embedding parts of Gemini directly into the chip architecture. Elsewhere, Domino’s Pizza advanced after reporting quarterly revenue that slightly exceeded Wall Street expectations.
Oracle stock fell nearly 4% after CLSA initiated coverage with a Hold rating, warning that the company would need $500 billion to support its expansion through 2030. Investors largely remained on the sidelines ahead of the week’s earnings releases from technology, energy, and consumer companies.
Corporate guidance, particularly from AI-related businesses, is expected to play a significant role in determining whether the recent weakness in semiconductor stocks marks a temporary correction or a broader shift in market sentiment. For more on related earnings previews, see Intel Stock Faces Potential 21% Drop to $75 as Q2 Earnings Approach and Micron, SanDisk Rebound 3% and 2.5% as Dip Buyers Test Memory Sector After 30% Rout.
This article is for informational purposes only and does not constitute financial advice.
