Wall Street’s major indexes closed lower on Monday as investors weighed developments in the Middle East and turned their attention to a busy week of earnings from some of the biggest US technology companies.
The Dow Jones Industrial Average fell 307.16 points, or 0.59%, to 51,839.26, while the S&P 500 declined 14.41 points, or 0.19%, to 7,443.28. The Nasdaq Composite slipped 12.17 points, or 0.05%, to 25,508.07.
Trading was subdued as investors awaited quarterly results from technology heavyweights including Alphabet, Tesla and Intel, which are expected to provide a clearer picture of corporate earnings momentum beyond the financial sector.
“Everybody is waiting for earnings season to really get going,” said Peter Tuz, president of Chase Investment Counsel, noting that investors may be “kind of sitting on their hands” ahead of results from sectors such as technology, energy and consumer-facing businesses.
Markets are currently expecting S&P 500 companies to post second-quarter earnings growth of 26% year-on-year, up from an earlier estimate of 23.7%, according to LSEG data.
Geopolitical developments also remained in focus after Yemen’s Iran-aligned Houthis announced a naval blockade on Saudi Arabia, broadening concerns over global energy supplies and trade. At the same time, a senior Iranian official told Reuters that mediators had delivered a proposal offering a 10-day ceasefire with the United States to revive an interim agreement reached last month.
Joe Quinlan, head of CIO market strategy for Merrill and BofA Private Bank, said investors were watching closely for any signs of easing tensions in the Middle East.
“The hope is if you get some type of resolution, less bombing, more talk in the Middle East, that oil prices and gasoline prices would not go as high as we saw earlier this year and therefore, alleviate some of that pressure on consumer prices,” Quinlan said, adding that investors were also positioning ahead of corporate earnings.
Technology stocks showed relative resilience, limiting losses on the Nasdaq. The Philadelphia Semiconductor Index recovered from earlier gains of nearly 4% to finish 0.6% higher after suffering a sharp sell-off last week that left it more than 20% below its late-June record high.
Alphabet climbed 1.5% after reports that its Google division is developing a Gemini-integrated server chip designed to improve artificial intelligence efficiency and reduce computing constraints. Microsoft was the biggest positive contributor to the S&P 500, while Apple weighed most heavily on the benchmark after falling 2%.
Elsewhere, Domino’s Pizza gained 2.1% after reporting second-quarter revenue that narrowly exceeded Wall Street expectations. Global Payments surged 5.8% after Morgan Stanley upgraded the stock to “overweight” and raised its price target to US$100 from US$65, making it the S&P 500’s best-performing stock of the day. Carvana was the benchmark’s biggest percentage loser, sliding 4.8%.
Market breadth remained negative, with declining stocks outnumbering gainers by 1.72-to-1 on the New York Stock Exchange and by 1.8-to-1 on the Nasdaq. Trading volume was also lighter than usual, with 15.5 billion shares changing hands on US exchanges compared with the 20-session average of 19.94 billion shares.
