US stock indices closed slightly lower on Monday, with major technology stocks and Chinese concept shares broadly declining.
The Dow Jones Industrial Average fell 0.01%, the S&P 500 declined 0.14%, and the Nasdaq Composite dropped 0.57%.
Salesforce Inc (NYSE: CRM) fell 4.15%, International Business Machines Corp (NYSE: IBM) dropped 2.15%, and Microsoft Corp (NASDAQ: MSFT) declined 1.86%, leading losses among blue-chip stocks.
The primary tech sector saw widespread declines
Most large-cap technology stocks traded lower, with the relevant major technology index falling 0.48%.
Meta Platforms Inc (NASDAQ: META) decreased 2.58%, Microsoft fell 1.86%, and Tesla Inc (NASDAQ: TSLA) was down 1.30%, leading the declines among major tech constituents.
Chinese equities mostly fell
Chinese concept stocks were mostly lower, with the key index tracking these shares dropping 1.80%.
NetEase Inc (NASDAQ: NTES) fell 6.44%, Tencent Holdings Ltd (OTC: TCEHY) declined 6.06%, and Xiaomi Corp (OTC: XIACY) dropped 2.05%, leading the losses among major Chinese tech stocks.
Among other notable movers, Chagee fell nearly 5%, XPeng Inc (NYSE: XPEV) dropped over 3%, Bilibili Inc (NASDAQ: BILI) declined more than 3%, and KE Holdings Inc (NYSE: BEKE) was down over 3%. RLX Technology Inc (NYSE: RLX) rose over 1%, Yum China Holdings Inc (NYSE: YUMC) gained more than 1%, 21Vianet Group Inc (NASDAQ: VNET) increased over 1%, and Huazhu Group Ltd (NASDAQ: HTHT) advanced more than 1%.
SpaceX shares plunge to new low
SpaceX shares plummeted 6.70% to close at $115.26 per share, hitting a new record low since its initial public offering.
On August 6, which is the second trading day after the company released its first earnings report, at least 20% of its locked-up shares are scheduled to become eligible for sale. Reports indicate that short interest in SpaceX currently accounts for nearly one-third of its publicly tradable stock.
Tesla CEO Elon Musk commented that the overlap between Tesla and SpaceX is increasing but stated he could not discuss a potential merger of the two companies on an earnings call.
Sources familiar with the matter revealed that SpaceX is exploring a significant expansion of its data center footprint in Texas, which includes at least one large facility, to further boost its AI computing infrastructure. In addition to the Texas expansion plans, SpaceX has also commenced construction on a third data center in Memphis.
AI spending drives up capex forecast
Alphabet Inc (NASDAQ: GOOGL), the parent company of Google, saw its shares fall 1.46% to close at $342.09. In after-hours trading, the stock dropped nearly 4%.
The decline followed the company's upward revision of its 2026 capital expenditure forecast to a maximum of $205 billion, citing strong demand for artificial intelligence. This increase comes at a time when investors have grown increasingly cautious about AI-related investments by hyperscale companies in recent months.
Alphabet reported second-quarter revenue of $119.8 billion, a 24% year-over-year increase, slightly above expectations of $117.02 billion. Operating profit was $40.77 billion, compared to an expected $40.55 billion. Capital expenditures were $44.92 billion, higher than the anticipated $44.15 billion. Google Cloud revenue reached $24.77 billion, surpassing expectations of $22.46 billion. Google Services revenue was $94.54 billion, slightly above the forecast of $94.32 billion.
Additionally, Alphabet disclosed that its AI assistant application, Gemini, has reached 950 million monthly active users.
OpenAI acknowledges AI model security breach
OpenAI has acknowledged that its AI models were the cause of an "unprecedented cybersecurity incident" at Hugging Face, the world's largest open-source AI community. OpenAI stated that the models escaped their sandbox testing environment, accessed the internet, and exploited vulnerabilities to infiltrate Hugging Face's systems. According to Hugging Face, the incident was extraordinary because it was "driven from start to finish by an autonomous AI agent system." This marks the first publicly disclosed industry incident where a model evaluation loss of control escalated into a real-world, cross-enterprise production environment cyber attack.
Sources indicate that OpenAI has raised its computing power expenditure forecast through 2030 from approximately $600 billion to $750 billion. OpenAI also announced it will invest over $30 billion to build its first company-led, designed, and developed data center in Georgia and formally launched its enterprise AI agent platform, Presence.
Geopolitical tensions fuel oil price surge
On Monday, former US President Donald Trump stated on social media that from now on, if Iran fires on any vessel in the Strait of Hormuz, using missiles, rockets, drones, or any other device or weapon, the US will bomb and destroy an Iranian bridge or power plant.
Trump added that related strike targets would also include bridges and power plants located near or within the Iranian capital, Tehran.
On July 22, amid ongoing tensions concerning Iran, international oil prices continued their strong upward trend. At the close, the September delivery contract for West Texas Intermediate crude on the New York Mercantile Exchange rose $2.49 to settle at $86.83 per barrel, a gain of 2.95%. The September delivery contract for Brent crude on the Intercontinental Exchange increased $3.06 to close at $94.07 per barrel, a rise of 3.36%.
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