The S&P 500 slipped 0.2% on Monday as a slide in chip stocks outweighed a decline in Treasury yields. Micron, AMD and Broadcom led the losses, while yields eased after a report that the Treasury may tap its General Account to fund bond buybacks. New tariffs on Canadian autos added further pressure on sentiment.
The S&P 500 fell 0.2% Monday, as a drop in chip stocks outweighed a move lower in Treasury yields. The Nasdaq Composite lost 0.5%, while the Dow Jones Industrial Average traded up 117 points, or 0.2%.
Six of the 11 S&P 500 sectors traded higher, with consumer staples leading, up 1.4%, while information technology lagged, down 1.3%. So far in August, the major averages are higher across the board, with the Dow on track for its fifth straight positive month and the S&P 500 and Nasdaq Composite on track for their first positive month in three.
Chip stocks lead the decline
Micron Technology shed more than 5%, while Advanced Micro Devices and Broadcom pulled back almost 3% and 2%, respectively. The iShares Semiconductor ETF slid 2%. Other tech names fell too: Coherent and Lumentum dropped 4% and 3%, Sandisk dropped 6%, Corning moved down 2% and Seagate Technology declined 6%.
Treasury yields ease, tariffs weigh on sentiment
Treasury yields moved lower after a report that the Treasury may use its General Account to fund a buyback operation. The 10-year Treasury note yield fell more than 4 basis points to 4.69%, while the 30-year Treasury yield, which topped 5.3% last week, shed 6 basis points to 5.216%. The report follows comments from Treasury Secretary Scott Bessent, who told CNBC last week that planned buybacks could be larger than the $4 billion announced days earlier. Federal Reserve Chairman Kevin Warsh is expected to address the buyback plans in a speech at the Fed's annual symposium in Jackson Hole, Wyoming, on Friday.
President Donald Trump also weighed on sentiment by announcing the U.S. will raise tariffs on Canadian autos, parts and steel to 50%, effective Jan. 1, 2027. Robert Conzo, chief executive officer at The Wealth Alliance, said the market is in "a little bit of the little summer doldrums" but could hold up well if earnings growth and inflation stay on track.
Investors this week await the July personal consumption expenditures price index on Wednesday, along with earnings from Nvidia and Marvell Technology due Wednesday and Thursday.
Source: CNBC
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