U.S. equity markets opened on a mixed note Monday, with the Dow Jones Industrial Average bucking the broader downtrend as renewed geopolitical tensions between the United States and Iran pushed crude prices higher and sparked a selloff in semiconductor stocks. Investors are also bracing for a heavy week of corporate earnings and critical inflation data.
The Dow gained approximately 122 points, or 0.23%, in early trading, while the S&P 500 slipped 0.17% and the Nasdaq Composite dropped 0.61%, led lower by technology shares. The cautious tone follows an escalation in Middle East hostilities over the weekend, with markets now pricing in heightened risk to global energy supplies.
Oil Surges on Strait of Hormuz Concerns
Geopolitical risk intensified after Iran claimed it had closed the Strait of Hormuz, a vital chokepoint for global oil shipments. President Donald Trump disputed the assertion, stating the waterway remains open to commercial traffic. The developments undermine a tentative agreement reached last month aimed at reopening the strait and de-escalating the conflict.
West Texas Intermediate crude rose about 3% to $73.83 per barrel, after briefly touching $75.08 overnight. Brent crude similarly gained roughly 3% to $78.52, reaching as high as $79.80. The spike in oil prices reignited concerns that higher energy costs could complicate the inflation outlook just as markets await the latest U.S. consumer price index report.
Chip Stocks Retreat After SK Hynix Debut
Semiconductor stocks came under renewed pressure following SK Hynix's blockbuster Nasdaq debut on Friday. The South Korean memory-chip maker's U.S.-listed shares fell about 7% after surging 13% on their first trading day. Weakness spread across the sector: Micron Technology declined roughly 6.4%, while Western Digital, Seagate Technology, and Sandisk each fell between 4% and 7%. Advanced Micro Devices and Intel also traded lower. The iShares Semiconductor ETF dropped more than 3%, reflecting broad weakness despite the sector's strong gains earlier this year. For more on the sector's recent volatility, see DRAM ETF Plunges 8% as SK Hynix, Samsung, Micron Stocks Tumble on Profit-Taking.
Earnings and Inflation Data Take Center Stage
Major Wall Street banks including JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and Wells Fargo are scheduled to report quarterly results this week. Netflix, Johnson & Johnson, General Electric, and UnitedHealth are also due to release earnings later in the week. According to LSEG I/B/E/S, S&P 500 companies are expected to report second-quarter earnings growth of 23.7% from a year earlier. FactSet estimates similarly point to profit growth of more than 23%, underscoring elevated expectations heading into the reporting season.
Markets will also focus on Tuesday's U.S. consumer price index report, which could influence the Federal Reserve's interest-rate outlook. Fed Chair Kevin Warsh is scheduled to deliver his first monetary policy testimony before Congress on Tuesday, while Fed Governor Christopher Waller is expected to speak later on Monday. For a broader market perspective, see S&P 500 Nears Record: Earnings, CPI, Iran Tensions, AI Jitters in Focus.
Despite Monday's pullback, the S&P 500 remains up more than 10% for the year and sits less than 1% below its early-June record closing high after posting a second consecutive weekly gain last week. The interplay between geopolitical risk, earnings momentum, and inflation data will likely dictate market direction in the days ahead. For related coverage on how these factors are affecting global markets, see Asian Markets Tumble as Oil Surge on Strait Tensions Hits Chip Stocks and Bonds.
This article is for informational purposes only and does not constitute financial advice.
