U.S. stock futures pointed to a mixed open on Monday, with technology shares bearing the brunt of selling pressure after a sharp escalation in U.S.-Iran tensions sent crude prices higher and reignited inflation fears. Nasdaq-100 futures led the decline, dropping 290 points or 0.9%, while S&P 500 futures fell 0.3%. Dow Jones Industrial Average futures were little changed, reflecting a defensive rotation out of growth-oriented tech names.
1. Chip Stocks Under Pressure
The selloff was concentrated in semiconductor stocks, where the recent AI-driven rally faced a reality check. Memory-chip makers were among the hardest hit: Micron Technology fell 5.2%, Western Digital lost 6%, Seagate dropped 4.8%, and SanDisk slid 6.6%. The iShares Semiconductor ETF (SOXX) declined 2.7%. US-listed shares of SK Hynix dropped 9.3% after its blockbuster Nasdaq debut on Friday, suggesting investors are reassessing AI-chip exposure after a sharp rally.
2. Oil Spike Revives Inflation Concerns
Crude futures rose more than 2% after Iran claimed it had closed the Strait of Hormuz, a critical chokepoint for global energy flows. The move followed an exchange of attacks between Iran and the U.S. in the Gulf, raising doubts about last month's interim agreement. Analysts warn that higher energy prices could complicate the Federal Reserve's inflation fight and threaten the momentum trade, particularly in tech and chip stocks.
3. Earnings Season Kicks Off
The S&P 500 remains up more than 10% year-to-date and less than 1% below its early-June record close. That resilience now faces a major test as earnings season gets underway. JPMorgan Chase, Goldman Sachs, and Morgan Stanley report this week, followed by Netflix, GE, and UnitedHealth. According to LSEG IBES, S&P 500 earnings are expected to rise 23.7% from a year earlier, with technology contributing a significant portion of that growth.
4. CPI Data and Fed Testimony on Deck
Tuesday's consumer price index (CPI) release will be closely watched for signs that energy pressures are feeding into broader inflation. Producer prices and retail sales data follow later in the week. Additionally, Fed Chair Kevin Warsh is scheduled to deliver his first monetary policy testimony before Congress, which could provide further clues on the central bank's rate path.
5. Market Outlook
Investors are navigating a crowded week of catalysts: chip volatility, bank earnings, inflation data, and Fed commentary. The divergence between Nasdaq and Dow futures underscores the market's cautious tone, with defensive positioning gaining favor. While long-term demand for memory and data-center hardware remains robust, near-term sentiment is fragile amid geopolitical uncertainty and rising energy costs.
This article is for informational purposes only and does not constitute financial advice.
