The Dow Jones Industrial Average closed 262.83 points higher on Monday as oil prices slid and semiconductor stocks bounced off their session lows. The S&P 500 ended almost flat while the Nasdaq Composite slipped, leaving the broader market little changed ahead of the Federal Reserve’s rate decision on Wednesday.
The Dow Jones Industrial Average rose 262.83 points, or 0.51%, to end Monday at 52,210.08. The broad-market S&P 500 added just 0.02%, closing at 7,413.18. Meanwhile the Nasdaq Composite lost 0.18% and settled at 24,932.08.
Communication services and consumer staples were the top performers in the session. Chipmakers had rallied earlier in the day after Chinese chipmaker CXMT’s blockbuster IPO on the Shanghai Stock Exchange.
Chip stocks bounce off session lows
Semiconductor stocks were down broadly, although they trimmed their losses. The VanEck Semiconductor ETF (SMH) lost more than 2%, adding to its Friday losses. AMD and Teradyne dropped 5% and 4%, respectively, to lead the declines. Micron Technology shed about 2%.
Equities came under pressure after The Information reported, citing sources familiar with the matter, that China had begun developing deep ultraviolet lithography machines used to build semiconductors. U.S.-listed shares of ASML, the dominant player in the space, fell almost 6% on the back of the report. Thomas Martin, senior portfolio manager and partner at Globalt Investments, told CNBC: “There’s just a lot of uncertainty about what is happening with Chinese companies”
Oil tumbles as the U.S. and Iran pause attacks
Oil prices slipped as the U.S. and Iran paused their attacks. Brent crude futures for September delivery ended down 8.7% at $88.36 a barrel. U.S. West Texas Intermediate crude futures settled down 7.5% to $82.61 a barrel.
Fed decision and megacap earnings land this week
The Fed will make its latest decision on interest rates on Wednesday. The consensus view is that the central bank will hike rates in September, but markets are pricing in the meaningful possibility that it will lift its benchmark borrowing rate a quarter percentage point as soon as this week, according to the CME FedWatch Tool.
A succession of quarterly reports from Amazon, Apple, Meta Platforms and Microsoft will either soothe investor fears of rampant artificial intelligence spending or add to them, after Alphabet’s disappointing results in the last week. Those results could directly affect the semiconductor companies that are the chief beneficiaries of the AI spending spree.
Source: CNBC
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