US equities finished mixed on Monday as the S&P 500 slipped while the Dow gained and the Nasdaq 100 edged lower. The decline was led by megacap technology after Alphabet fell more than 5%, while strength in chipmakers helped cushion the broader market early on. Trading also tracked renewed moves in oil and shifts in rates expectations amid ongoing geopolitical risk around the Middle East.
Key takeaways
- Index moves: The S&P 500 fell 0.37%, the Dow rose 0.29%, and the Nasdaq 100 declined 0.19%.
- Major catalyst: Alphabet slid more than 5% after announcing the departure of a Google DeepMind vice president to join Anthropic.
- Cross-asset driver: Crude oil volatility tied to US-Iran negotiations and Strait of Hormuz developments influenced risk appetite.
- Sector implication: Software weakness pressured the market, while semiconductors rallied, lifting the AI-infrastructure complex.
- Rates backdrop: The 10-year Treasury yield rose to about 4.51% as upcoming Treasury supply and Fed rate expectations remained in focus.
What drove the stock market’s turn
Although US index futures initially pointed higher, the major averages ultimately reversed into a mixed finish. Alphabet was the standout drag, dropping more than 5% after the company said Google DeepMind vice president Jumper is leaving to join Anthropic PBC. The move rippled through megacap technology, contributing to weakness across the Nasdaq and the broader market.
Software stocks also weighed on sentiment. Several names in the software group ended the session lower, including Palantir, Oracle, and other large-cap software and productivity firms, pulling down sectors that had been leading earlier in the day.
Oil swings and the Middle East factor
Risk appetite on Monday was closely linked to crude oil after Iran threatened to suspend talks and close the Strait of Hormuz, following Israeli attacks in Lebanon. That backdrop pushed oil more than 2% higher at one point, and index futures weakened overnight.
The direction shifted after Iran said it had made “major progress” during all-night discussions with the United States on a peace deal. The report also cited an interim agreement that extended a 60-day ceasefire and helped reopen the Strait of Hormuz. Separately, Pakistan and Qatar said in a joint statement that talks showed “encouraging progress” and that the US and Iran agreed to form a high-level committee, including working groups on nuclear issues and sanctions, as well as a de-confliction process related to Lebanon. After the news, crude oil gave back more than 2%, helping remove some of the early pressure from markets.
Semiconductors provide support as software lags
Even with software and megacap technology acting as headwinds, the market found support in chips and AI infrastructure. The iShares Semiconductor ETF rose more than 2% to a new record high. Individual gainers included ON Semiconductor, Micron Technology, and other semiconductor names that finished sharply higher, helping the Nasdaq 100 avoid a larger decline.
By contrast, the defense and aerospace complex slid on Monday after the Iran-US negotiation update, with several defense contractors moving lower as part of a broader risk repricing.
Rates and policy expectations stay in focus
Treasury yields moved upward on Monday. According to the session data, September 10-year T-notes closed down 12.5 ticks, while the 10-year Treasury yield rose 5.4 basis points to about 4.507%. The report also noted that 10-year yields reached a one-week high around 4.513% and were pressured by negative carryover from the prior week’s Fed outlook for higher rates later this year.
Supply dynamics also mattered. The Treasury’s plan to auction $211 billion of 10-year notes and floating-rate notes this week, beginning with a Tuesday auction of $69 billion of 2-year notes, was cited as a factor undercutting T-notes.
Over in Europe, yields were reported to be lower, with the German bund yield down 3.3 basis points to 2.952% and the UK gilt yield ending 3.4 basis points lower at 4.808%. ECB President Christine Lagarde said the ECB does not need to respond more forcefully to the Middle East conflict because inflation is expected to return to target over the medium term, according to the report.
Market pricing in the US remained tilted toward the next Federal Reserve meeting. The article said markets were discounting a 39% chance of a 25 basis point rate hike at the July 28-29 FOMC meeting.
Overseas markets extend the day’s mixed tone
International trading settled higher on Monday. The Euro Stoxx 50 closed up 0.29%, China’s Shanghai Composite climbed to a one-month high and rose 1.78%, and Japan’s Nikkei 225 reached a new all-time high, finishing up 1.55%.
Company highlights and deal-related moves
In addition to Alphabet’s broad impact, Monday’s single-stock activity included a mix of market-moving developments. Tesla bucked the trend, rising more than 1% after Jeffries increased its price target. Among other notable movers, Netflix fell more than 5% after a caution on user trends, and Ligand Pharmaceuticals dropped more than 4% following its plan to offer convertible senior notes.
Acquisition and credit-related headlines also contributed to sector dispersion. Apogee Therapeutics rose more than 46% after AbbVie agreed to buy the company for $10.9 billion. Baldwin Insurance Group gained more than 16% after JPMorgan Chase upgraded the stock. Super Micro Computer jumped more than 15% after GF Securities upgraded its rating, and Incyte advanced more than 5% after BMO Capital Markets raised its view.
Looking ahead, investors will be watching whether Monday’s oil-fueled stabilization holds and how rates trade around the Treasury’s scheduled auctions. Upcoming corporate earnings also remain a near-term driver, with reports scheduled on June 23 from companies including Carnival, FedEx, and others listed in the session’s earnings calendar.
