US stocks ended mixed on Monday, with the Dow Jones Industrial Average climbing more than 260 points while the S&P 500 finished nearly flat. Semiconductor stocks saw widespread declines, and oil prices fell sharply.
At the close, the Dow rose 262.98 points, or 0.51%, to 52,210.23. The Nasdaq Composite dropped 43.74 points, or 0.18%, to 24,932.08. The S&P 500 edged up 1.24 points, or 0.02%, to 7,413.22.
Semiconductor stocks were broadly lower but recovered from their session lows. The VanEck Semiconductor ETF (SMH) fell about 2%, extending its losses from Friday. Advanced Micro Devices (AMD) and Teradyne (TER) led the sector lower, dropping 4% and 5%, respectively. Micron Technology (MU) declined about 3%, while SanDisk (WDC) closed down 11%. Chipmakers had initially risen in early trading following a blockbuster initial public offering on the Shanghai Stock Exchange by Chinese chipmaker ChangXin Memory Technologies (CXMT) on Monday.
Analysts noted that traders are rotating investments into consumer staples and communication services stocks, as signs emerge that the artificial intelligence bubble is "deflating." This shift is particularly evident as the stock market remains below the all-time highs set in late June.
Oil prices tumbled as tensions between the US and Iran eased. International benchmark Brent crude futures for September delivery fell 8.7% to approximately $88.36 per barrel. US West Texas Intermediate crude futures settled 7.5% lower at $82.61 per barrel.
Major stock indexes face a challenging week ahead. Following disappointing results from Alphabet (GOOGL) last week, Amazon (AMZN), Apple (AAPL), Meta Platforms (META), and Microsoft (MSFT) are set to release quarterly reports. These results will either ease or intensify investor concerns about the frenzy of AI spending. The outcomes could directly impact semiconductor companies that are major beneficiaries of the AI capex boom.
The Federal Reserve is scheduled to announce its latest interest rate decision on Wednesday. While market expectations lean toward a rate hike in September, the CME FedWatch Tool indicates a significant probability that the Fed will raise the benchmark borrowing rate by 25 basis points as early as this week.
Comments