Wall Street’s main indexes opened lower on Monday as renewed tensions between the United States and Iran pushed oil prices higher, while a broad selloff in semiconductor stocks added to pressure ahead of a busy week of corporate earnings and economic data.
Dow Jones Industrial Average bucked the trend and opened higher by about 122 points, or 0.23%.
The S&P 500 fell 0.17%, while the Nasdaq Composite declined around 0.61%, with technology stocks leading losses.
The cautious mood followed another escalation in the Middle East over the weekend, with investors also preparing for second-quarter earnings reports from major US banks and key inflation data that could shape expectations for Federal Reserve policy.
Oil rises as US-Iran conflict escalates
Geopolitical concerns intensified after the United States and Iran exchanged attacks over the weekend.
Tehran said it had closed the Strait of Hormuz, a key shipping route for global energy supplies, although President Donald Trump disputed the claim on Sunday, saying the waterway remained open to commercial traffic.
The latest developments undermined an interim agreement reached last month that had sought to reopen the strait and de-escalate the conflict following weeks of negotiations.
Oil prices climbed as markets assessed the risks to global energy supplies.
West Texas Intermediate crude rose about 3% to $73.83 per barrel after briefly touching $75.08 overnight.
Brent crude also gained roughly 3% to $78.52 after reaching as high as $79.80.
The increase in crude prices revived concerns that higher energy costs could complicate the inflation outlook just as investors await fresh US consumer price data.
Chip stocks retreat after SK Hynix debut
Semiconductor stocks came under renewed pressure after South Korean memory-chip maker SK Hynix’s blockbuster Nasdaq debut on Friday.
US-listed shares of SK Hynix fell about 7% in trading after surging 13% on their first trading day.
The weakness spread across the semiconductor 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 across chipmakers despite the sector’s strong gains earlier this year.
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 US 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.
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.
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