U.S. stock index futures and major benchmarks traded slightly lower on Monday as crude oil prices pushed up inflation expectations and weighed on Treasury yields. The S&P 500 slipped 0.04%, the Dow Jones Industrial Average fell 0.14%, and the Nasdaq 100 declined 0.15%, with weakness in parts of the technology and consumer software complex offset by strength in energy and select cybersecurity names.
WTI crude oil rose more than 2% during the session, lifting the 10-year Treasury yield by about 3 basis points to 4.68%. Futures tracking the S&P 500 and Nasdaq 100 also eased, suggesting investors were balancing near-term macro pressure against an earnings backdrop that remains supportive.
Key takeaways
- Index moves: The S&P 500 fell 0.04%, the Dow slipped 0.14%, and the Nasdaq 100 dropped 0.15%.
- Catalyst: Higher WTI crude pushed up inflation expectations and lifted the 10-year Treasury yield to 4.68%.
- Offset: Energy and cybersecurity stocks gained, while AI-related optimism continued to support broader market sentiment after a TSMC sales update.
- Earnings focus: Data cited in the market commentary pointed to strong Q2 earnings momentum, with AI seen as a key driver of profit growth.
- Implication: Investors are likely to remain sensitive to oil-driven rates while watching earnings releases and upcoming central-bank decisions.
What drove the move
Oil and rates were the dominant near-term influences. WTI crude rose more than 2%, and the higher energy price environment fed into bond-market pricing—pressuring 10-year Treasury notes and lifting the yield to 4.68%. Market participants also appeared to weigh Treasury supply dynamics, as the Treasury is set to auction $125 billion of notes and bonds this week.
Energy prices were supported by continued uncertainty around the Strait of Hormuz. Iran and Oman remained short of a deal to reopen the shipping route, according to comments cited from Iran’s foreign minister, which would require additional conditions related to U.S. policy and sanctions. Separately, the report noted ongoing risks in the Middle East after a UAE tanker was targeted by a missile while transiting the strait and after Houthi militants claimed an attack on Saudi Arabia’s Jazan refinery.
Market reaction: winners, laggards, and sector leadership
Despite the pressure from higher yields, losses were limited by sector-level strength. Energy stocks advanced alongside crude oil. APA Corp rose more than 5%, and Occidental Petroleum and Marathon Petroleum gained more than 4%. Other large-cap energy names, including ConocoPhillips, Devon Energy, Diamondback Energy, ExxonMobil, and Chevron, were also higher, with multiple constituents in the Dow trading up.
Cybersecurity stocks provided additional support to broader risk appetite. CrowdStrike, Palo Alto Networks, and Fortinet gained more than 3%, while Zscaler and Okta rose more than 2%, according to the session’s stock-mover summary.
In contrast, several stocks fell on company-specific news and guidance. Monday.com dropped more than 8% after forecasting Q3 revenue below consensus. The Trade Desk fell more than 4%, extending losses after reporting weaker-than-expected Q2 results and projecting Q3 revenue under expectations. Intel slid more than 4% after announcing its intention to offer $15 billion in common stock, while Apple dropped more than 2% following a downgrade cited in the report.
Other notable single-name reactions included Cloudflare, which was lower after outlining a plan to offer convertible senior notes due 2031; and Varex Imaging, which surged after Teledyne agreed to acquire the company for $1.1 billion, or $18.90 per share. Hewlett Packard Enterprise gained more than 3% after an upgrade to overweight from neutral; meanwhile, RadNet rose after increasing its full-year Imaging Center revenue estimate range.
Earnings and AI remain the counterweight
Alongside macro pressure, earnings expectations were a key reason investors were not retreating aggressively from equities. JPMorgan Chase raised its year-end projection for the S&P 500 to 8,000 from 7,800, citing a strong earnings season and faster AI monetization than previously expected.
The broader earnings outlook referenced in the market commentary suggested Q2 growth expectations remain elevated. Bloomberg Intelligence data cited in the report said the S&P 500 was tracking for earnings growth of almost 32% in Q2, above a projection of +23%. It also pointed to AI infrastructure as a major contributor to earnings-per-share growth for the quarter, with earnings results so far showing a high share of companies beating estimates based on Bloomberg data.
In the semiconductor supply chain, optimism around AI spending received support from Taiwan Semiconductor Manufacturing’s July sales update. The report said July sales rose 45% year over year, a sign of sustained demand for advanced AI hardware. That development helped maintain support for equities even as oil and yields moved against riskier assets.
Bigger picture: rates, central banks, and supply
Bond-market moves were tied not only to inflation expectations from crude oil but also to upcoming supply. European government bond yields were also higher in the session, with the 10-year German bund yield rising to 3.156% and the 10-year UK gilt yield moving to 4.960% in the report’s data.
Central-bank expectations remained embedded in rates pricing. The market was discounting a 47% chance of a 25 basis point rate hike at the next FOMC meeting on September 15–16, and it was also pricing an 87% probability of a 25 basis point ECB hike at the September 10 meeting.
Overseas, the mood was more constructive. The report cited gains in Europe and Asia, including China’s Shanghai Composite moving to a 3.5-week high and Japan’s Nikkei-225 reaching a two-week high.
What to watch next: Investors will likely monitor continued oil-price developments tied to geopolitical risk around the Strait of Hormuz and the impact on Treasury yields. With major bond auctions underway this week, the next readings on inflation and central-bank guidance—along with scheduled earnings reports starting on August 10, 2026—will be critical for determining whether the market can sustain upside momentum despite a higher-rate backdrop.
