BY COMFORT OGBONNA
Wall Street’s major stock indexes closed lower on Monday as investors weighed ongoing geopolitical risks in the Middle East and prepared for a busy week of corporate earnings reports from some of the world’s largest technology companies.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all finished in negative territory, though technology stocks showed some resilience as semiconductor companies recovered part of their recent losses. Gains in communication services, technology and energy sectors helped limit broader market declines.
Investors are closely watching the second-quarter earnings season, which is expected to accelerate this week with results from major companies including Alphabet, Tesla and Intel. The reports will provide a clearer view of corporate performance and help determine whether high expectations surrounding artificial intelligence investments can be justified.
“Everyone is waiting for earnings season to really gain momentum,” said Peter Tuz, president of Chase Investment Counsel. He noted that many investors appeared hesitant to make major moves ahead of important reports from technology, energy and consumer-focused companies.
Markets were also influenced by developments in the Middle East, where concerns about a wider conflict continued to affect investor sentiment and energy markets. Yemen’s Iran-aligned Houthi movement announced plans to impose a naval blockade on Saudi Arabia, increasing concerns about possible disruptions to global energy supplies and trade routes.
At the same time, diplomatic efforts were underway to reduce tensions. Iranian officials said mediators had presented Tehran with a proposal for a temporary ceasefire aimed at creating an opportunity for negotiations and a possible path toward a broader agreement.
Investors have been closely monitoring the situation because any disruption to major energy routes could push oil prices higher and increase inflation pressures.
Joe Quinlan, head of CIO market strategy for Merrill and Bank of America Private Bank, said investors were looking for signs of progress toward a resolution that could help stabilize oil markets and reduce pressure on consumers.
“The hope is that if there is some type of resolution, with less conflict and more dialogue, oil and gasoline prices would not rise as sharply,” Quinlan said, adding that investors were also positioning themselves ahead of upcoming earnings announcements.
Analysts are expecting strong corporate results this quarter, with S&P 500 earnings projected to rise about 26% compared with the same period last year. That estimate is higher than previous expectations of roughly 23.7% growth.
A major focus for investors will be the semiconductor sector, particularly companies such as Intel and Texas Instruments, as markets look for signs that demand linked to artificial intelligence remains strong.
The Philadelphia Semiconductor Index recently entered bear-market territory after falling more than 20% from its late-June record high. Although the index gained nearly 4% earlier on Monday, it ended the session with a smaller increase of 0.6%.
The Dow Jones Industrial Average declined 307.16 points, or 0.59%, to close at 51,839.26. The S&P 500 fell 14.41 points, or 0.19%, to 7,443.28, while the Nasdaq Composite slipped 12.17 points, or 0.05%, to 25,508.07.
Among individual companies, Apple was one of the biggest contributors to the S&P 500’s decline, falling about 2%. Microsoft provided one of the strongest positive contributions to the index.
Global Payments was the top percentage gainer on the S&P 500, rising 5.8% after Morgan Stanley upgraded the stock and increased its price target. Carvana was the biggest decliner, dropping 4.8%.
Alphabet shares climbed 1.5%, helping support the broader market after reports indicated that Google is developing a new server chip integrated with its Gemini artificial intelligence technology. The chip is designed to improve AI efficiency and address growing demand for computing capacity.
Elsewhere, Domino’s Pizza gained 2.1% after quarterly revenue exceeded Wall Street expectations, boosting investor confidence in the company’s performance.
Despite some gains among major technology companies, overall market breadth remained weak. On the New York Stock Exchange, declining stocks outnumbered advancing shares by a ratio of about 1.72 to 1, with 106 stocks reaching new 52-week highs and 116 hitting new lows.
On the Nasdaq, 3,030 stocks declined while 1,684 advanced, creating a decline-to-advance ratio of roughly 1.8 to 1. The Nasdaq Composite recorded 46 new highs and 180 new lows, while the S&P 500 posted 10 new highs and six new lows.
Trading activity was lighter than usual, with about 15.5 billion shares changing hands across U.S. exchanges, compared with the average of nearly 19.94 billion shares over the previous 20 trading sessions.
With investors balancing geopolitical uncertainty, shifting expectations for interest rates and the outlook for artificial intelligence spending, markets are expected to remain sensitive to this week’s major earnings reports and any developments in global energy markets.
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