Wall Street opened mixed on Monday, with the Dow Jones Industrial Average gaining about 40 points while the S&P 500 and Nasdaq Composite slipped, as investors positioned for a week packed with major earnings and inflation data. The muted start follows a volatile stretch in which rising government bond yields weighed on technology shares and dragged the broader market lower.
Treasury yields ease, but concerns linger
Treasury yields retreated on Monday after reports that the U.S. Treasury could use its General Account to help fund bond buyback operations. The 10-year yield fell roughly 4 basis points to 4.7%, while the 30-year yield declined to about 5.23%, after touching levels not seen in nearly two decades last week.
Investors remain cautious about the trajectory of yields, especially with the Federal Reserve's preferred inflation gauge due later this week. The July Personal Consumption Expenditures price index, scheduled for release on Wednesday, could influence expectations for interest rate policy. Traders have fully priced in one 25-basis-point rate hike by the end of 2026, though softer inflation data earlier this month tempered bets on an immediate move.
Nvidia earnings put AI trade in focus
Technology stocks stayed under pressure ahead of Nvidia's quarterly results, expected later this week. The chipmaker's report will be closely scrutinized for signs that AI-related spending remains robust enough to justify elevated valuations in the semiconductor sector. Concerns about high valuations have intensified after recent weakness across the group.
Adding to the anxiety, Bloomberg News reported over the weekend that Nvidia had informed customers that servers containing its Vera Rubin and Blackwell chips could see price increases of more than 15%. Several semiconductor names moved lower in response: Micron fell more than 5%, while Advanced Micro Devices and Broadcom also declined. The iShares Semiconductor ETF dropped 2.6%, and other AI infrastructure names such as Coherent, Lumentum, SanDisk, Corning, and Seagate Technology also came under pressure.
AI earnings will remain in the spotlight throughout the week, with Nvidia scheduled to report on Wednesday and Marvell Technology expected to release results on Thursday. Investors will be watching for any commentary on demand trends and supply constraints that could affect the broader tech sector. For context, see our preview of Nvidia's earnings week and the market drivers this week.
Geopolitical tensions and inflation data add uncertainty
Geopolitical developments also weighed on sentiment. The U.S. has signaled it could impose economic sanctions targeting Iran's trading partners, with Treasury Secretary Scott Bessent describing the planned measures as an "economic D-Day." Investors are monitoring whether additional sanctions could further disrupt energy markets, as oil prices have already risen on concerns that the conflict could restrict supply and keep inflation elevated.
The combination of geopolitical risks and upcoming inflation data has left markets on edge. While the Dow managed to eke out gains, the broader market's weakness reflects lingering worries about the sustainability of the AI-driven rally and the path of interest rates. As earnings resilience counters the Treasury yield surge, investors will be parsing the data for clues on the Fed's next move.
With Nvidia's earnings and the PCE report both due midweek, volatility could pick up. Traders are also keeping an eye on the Nasdaq futures slide and the potential impact of Iran sanctions on global markets.
This article is for informational purposes only and does not constitute financial advice.
