U.S. stocks finished unevenly Monday as investors weighed a major week of technology earnings, falling oil prices and the possibility that persistent inflation could prompt the Federal Reserve to raise interest rates.
By yourNEWS Media Newsroom
Wall Street closed mixed Monday as investors shifted money toward defensive sectors while awaiting earnings reports from some of the nation’s largest technology companies and assessing whether elevated energy costs could push the Federal Reserve toward another interest-rate increase.
The Dow Jones Industrial Average gained 255.58 points, or 0.49%, to finish at 52,202.83, according to preliminary data. The S&P 500 added 1.45 points, or 0.02%, to close at 7,413.43, while the technology-heavy Nasdaq Composite fell 41.21 points, or 0.16%, to 24,934.61.
Consumer staples and health care stocks advanced, helping offset losses in technology and energy shares. The uneven performance continued a market rotation away from some of the artificial intelligence-related companies that had led stocks higher over the past several years.
“Today represents a continuation of the rotational market that we’ve seen,” said Bill Merz, head of capital markets research and portfolio construction at U.S. Bank Asset Management Group.
“Part of the market reaction may be related to that creeping suspicion that perhaps a rate hike is coming.”
Investors are preparing for quarterly results from Microsoft, Amazon, Meta and Apple later this week. The reports are expected to provide new evidence about whether the enormous spending required to develop artificial intelligence products is producing sufficient revenue and profits.
Concerns intensified after Tesla and Alphabet reported quarterly results last week that revealed substantial AI-related expenditures. Those disclosures unsettled investors who had supported a multiyear rally based on expectations that artificial intelligence would drive rapid earnings growth across the technology sector.
The PHLX Semiconductor Index extended its recent decline Monday. The chip benchmark has fallen approximately 20% from its record closing high on June 22, although it remains about 63% higher for 2026.
Developments in China added to competitive concerns for American semiconductor companies. Chinese memory-chip manufacturer CXMT Corp. recorded a strong market debut Monday, while a separate report indicated that China had begun manufacturing domestically developed deep-ultraviolet lithography equipment used in semiconductor production.
Those advances suggested that Chinese companies are making progress toward reducing their reliance on foreign chipmaking technology, potentially increasing competitive pressure on U.S. manufacturers and equipment suppliers.
Technology earnings remain a central market focus because AI-related stocks are expected to account for a substantial portion of corporate profit growth. Analysts forecast that combined second-quarter earnings for S&P 500 companies will rise 39% from the same period a year earlier, according to LSEG I/B/E/S.
The S&P 500 was trading at approximately 20 times projected earnings, matching its 10-year average, according to LSEG data. Investors are closely examining whether expected profit growth is sufficient to justify valuations after the market’s strong advance.
Energy prices provided some relief Monday. Brent crude fell approximately 8% to about $89 per barrel after President Donald Trump said the United States was engaged in “good talks” with Iran and that an agreement remained possible.
Trump also warned that American military strikes would resume if negotiations failed.
The decline brought crude prices to their lowest level in about a week. Oil had surged during the previous week, with Brent futures rising above $100 per barrel after renewed attacks on commercial shipping in the Middle East heightened concerns about supply disruptions.
Washington abruptly suspended a two-week campaign of airstrikes against Iran on Saturday, marking another strategic shift in the five-month conflict. The pause reduced some immediate fears that fighting could further restrict oil shipments through the region.
Shares of Occidental Petroleum and Exxon Mobil declined as crude prices retreated.
Although cheaper oil can ease inflationary pressure, investors remain concerned that the earlier surge in energy costs could keep consumer prices elevated and complicate the Federal Reserve’s policy decisions.
The central bank is scheduled to announce its next interest-rate decision Wednesday. Traders assigned a 62% probability that policymakers would leave rates unchanged and a 38% probability of a quarter-percentage-point increase, according to the CME FedWatch tool.
Expectations for a possible increase have risen as markets evaluate whether inflation is proving more persistent than policymakers anticipated.
The June Personal Consumption Expenditures Price Index is scheduled for release Thursday, one day after the Fed’s decision. The measure is closely watched because it is the central bank’s preferred gauge of inflation.
A stronger-than-expected reading could reinforce expectations that interest rates will remain high or rise later in the year. A softer result could reduce concerns that the Fed will need to tighten policy further.
The market’s mixed finish reflected the competing forces facing investors. Lower oil prices improved the near-term inflation outlook, but uncertainty surrounding the Iran conflict, technology spending and monetary policy limited broader gains.
Defensive sectors benefited as investors sought companies considered less vulnerable to changes in economic growth or interest rates. Technology shares faced greater pressure because higher borrowing costs can reduce the present value investors assign to future earnings, particularly for rapidly growing companies with elevated valuations.
The week’s largest technology reports could determine whether the AI-driven market rally regains momentum or whether investors continue rotating toward other parts of the economy.
Microsoft, Amazon, Meta and Apple are expected to face questions about capital spending, demand for AI services, profit margins and the timetable for generating returns from data centers, chips and other infrastructure.
Strong results and confident guidance could reassure investors that AI investment remains capable of supporting earnings growth. Disappointing forecasts or another round of sharply higher spending could deepen concerns that the sector’s expansion has moved ahead of its near-term financial returns.
For now, the Dow’s gain and the Nasdaq’s decline underscored a market divided between optimism about corporate earnings and unease over inflation, interest rates and the cost of sustaining the artificial intelligence boom.
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