The S&P 500 and Nasdaq fell Monday as chip stocks sold off ahead of Nvidia's earnings and a threatened U.S. sanctions push against Iran's trade partners. The Dow Jones bucked the trend on gains in financial shares, while investors turned to Federal Reserve Chair Kevin Warsh's Friday speech at Jackson Hole for clues on interest rates.
The S&P 500 lost 13.52 points, or 0.18%, to 7,660.85 on Monday, and the Nasdaq Composite fell 99.04 points, or 0.38%, to 26,081.41, dragged lower by technology shares. The Dow Jones Industrial Average rose 146.59 points, or 0.28%, to 53,423.60 at 11:55 a.m. ET, kept afloat by gains in financial stocks.
U.S. Treasury Secretary Scott Bessent warned of drastic economic measures against Iran in an opinion piece published in the Financial Times, and the U.S. has threatened sanctions targeting Iran's trade partners. Bessent is scheduled to hold a press conference on the sanctions Monday afternoon. Markets in Europe weighed the same risk: the pan-European STOXX 600 closed unchanged at 654.21 points as traders there also awaited details of the sanctions push.
Chip stocks lead the tech selloff
The Philadelphia SE Semiconductor index fell 2.64% to its lowest level in three weeks. Nvidia lost 2.03%, Micron Technology shed 5.76% and Broadcom slid 1.74%, pressuring the S&P 500 Information Technology index. Financials moved the other way, gaining 1.19%, with JPMorgan Chase up 1.49% and Visa adding 2.64%.
Nvidia earnings and Warsh's Jackson Hole speech loom
Nvidia's quarterly results, due Wednesday, are expected to be another key catalyst for markets, and any sign of slowing growth could reignite concerns over stretched valuations. According to Reuters: "Nvidia needs to impress in order to keep one leg of the stock market stable", said Richard Reyle, chief investment officer at Questar Capital Partners.
The remark points to Warsh's Friday speech at the Jackson Hole symposium, where investors will look for clues on the Fed's reading of the Treasury's rescue efforts. Concerns over ballooning government debt had pushed the 30-year yield to a 19-year high before the Treasury announced support measures last week. The yield has stayed above the 5% threshold since.
Inflation data and tariffs add to the pressure
Markets are also watching the Personal Consumption Expenditures report due Wednesday, the Fed's preferred inflation gauge. Traders expect one 25-basis-point hike by the end of 2026, according to LSEG data. Separately, President Trump warned that tariffs on cars, trucks and automotive parts from Canada would rise to 50% starting January 1 after trade talks collapsed over the weekend.
Ford lost 3.9% and General Motors lost 1.9%, while J.B. Hunt Transport slipped about 5.4%. Declining issues outnumbered advancers by a 1.14-to-1 ratio on the NYSE.
Sources: Economy News (Investing.com), Economy News (Investing.com)
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