Stock Indices Finish Mostly Lower on Chipmaker Weakness

The S&P 500 Index ($SPX) (SPY) closed down by -0.28% on Monday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.26%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down by -0.97%. E-mini S&P futures (ESU26) fell -0.27%, and September E-mini Nasdaq futures (NQU26) fell -0.95%.

Stock indices settled mostly lower on Monday, with the S&P 500 falling to a 2.5-week low and the Nasdaq 100 falling to a 3-week low. The broader market was under pressure on Monday amid the weakness in chipmakers and AI-infrastructure stocks. Also, weighing on market sentiment was the collapse of trade talks late last Friday between Canada and the US, prompting the US to apply a 50% tariff on about $20 billion of Canadian goods. Canada announced retaliation on US goods that will take effect on September 8.

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Stock losses were limited on Monday as crude oil prices fell more than -2%, pushing inflation expectations and bond yields lower. The 10-year T-note yield fell -3 bp to 4.70%.

Monday's US economic news showed the July Chicago Fed national activity index fell -0.14 to -0.08, slightly stronger than expectations of -0.09.

US Treasury Secretary Scott Bessent said Monday that the US announced a campaign to sever Iran from the global economy, warning that any country doing business with Iran risks facing US sanctions. He said the US is focusing on five of Iran's "most vital lifelines," including digital assets, technology, gold, aviation, and shipping, and that countries will have a defined timeline to shut down economic cooperation with Iran; if they don't, the Treasury will act unilaterally.

Iran's secretary of the Supreme National Security Council said, "Iran will regard any country's participation in or support for America's economic war against the Iranian people as an act of war and not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf."

Oct WTI crude oil prices (CLV26) fell more than -2% on Monday after Axios reported that about 40 tankers transited out of the Strait of Hormuz last Friday night, transporting around 16 million bbl of crude. Also, the Joint Maritime Information Center cut the threat level for shipping in the Gulf of Oman to "moderate," one step lower than the previous assessment. The moderate assessment means the threat of attack on shipping off the coast of Oman is possible but not likely.