U.S. stocks were mixed on Monday after an early rally faded, as a steep semiconductor sell-off offset relief from falling oil prices and easing tensions between the United States and Iran. The Dow Jones Industrial Average held modestly higher, while the S&P 500 and Nasdaq Composite moved lower as investors pulled back from AI-linked chipmakers.
Markets initially welcomed a temporary pause in U.S.-Iran military strikes, which raised hopes that negotiations could resume and helped send crude prices sharply lower. Attention quickly shifted back to technology, however, as concerns about Chinese semiconductor advances and the enormous financing needs of the AI industry weighed on Nvidia, AMD, ASML, and memory-chip stocks.
Market Movers:
- Forte Biosciences (FBRX) +40%: Shares surged after argenx agreed to acquire the biotechnology company for approximately $2.2 billion. The $77-per-share cash offer represents a substantial premium and gives argenx control of FB102, Forte’s experimental anti-CD122 antibody for autoimmune diseases.
- D-Wave Quantum (QBTS) +17%: The quantum-computing company rallied after announcing an agreement with AT&T to expand the telecom provider’s use of D-Wave technology for network optimization. Although financial terms were not disclosed, the deal offered another sign of growing commercial interest in quantum applications.
- Sarepta Therapeutics (SRPT) +7%: Shares rose after the biotechnology company named Michael Severino as its next chief executive. Severino, the former CEO of Tessera Therapeutics, will take over from retiring CEO Doug Ingram and join Sarepta’s board.
- General Motors (GM) +2.6%: The automaker advanced after Jefferies upgraded the stock to Buy and set a $99 price target. The firm argued that GM’s position in the profitable U.S. auto market could strengthen further in 2027 and highlighted the company’s flexibility to deploy excess cash.
- L3Harris Technologies (LHX) +2%: Shares gained after the defense contractor signed two seven-year agreements to expand propulsion-system production for Patriot and THAAD missile interceptors. The deals reflect continued efforts to increase U.S. manufacturing capacity for air and missile defenses.
- MapLight Therapeutics (MPLT) -65%: Shares collapsed despite positive Phase 2 results for the company’s schizophrenia treatment. Investors focused on the failure of a once-daily dosing regimen to reach statistical significance on the study’s primary endpoint.
- Cracker Barrel (CBRL) -4.6%: The restaurant chain declined after naming former Bloomin’ Brands CEO David Deno as its next chief executive. He will replace Julie Masino in August as Cracker Barrel continues efforts to stabilize sales and recover from a controversial rebranding campaign.
- Exxon Mobil (XOM) -2%: Shares fell alongside the broader energy sector as crude oil prices dropped sharply. The pause in U.S.-Iran strikes increased hopes for a diplomatic resolution and the eventual reopening of shipping routes through the Strait of Hormuz.
Chip Stocks Reverse Early Market Gains
Semiconductor stocks emerged as the market’s biggest source of weakness. Nvidia fell sharply alongside AMD, ASML, Micron, and SK Hynix after reports raised concerns that China was making progress in producing advanced chipmaking equipment. The development intensified fears that Chinese companies could reduce their dependence on Western semiconductor technology and eventually challenge U.S. leadership in artificial intelligence.
ASML was particularly exposed because of its dominant position in advanced lithography equipment, while Nvidia and AMD declined on concerns about both competition and the sustainability of AI infrastructure spending.A separate report that Nvidia could help finance as much as $250 billion of OpenAI’s computing buildout added to investor unease. The prospect of chipmakers financing their own customers reinforced concerns about circular investment across the AI ecosystem and raised fresh questions about where funding for increasingly expensive data centers will come from.
Oil Prices Sink as Middle East Tensions Ease
Oil prices fell more than 7% after the United States and Iran paused attacks over the weekend, offering markets some relief following weeks of escalating conflict. Brent crude dropped below $90 per barrel, while U.S. crude also moved sharply lower. The decline helped pull Treasury yields down as investors reduced expectations for an immediate inflation shock from energy prices.
Lower oil costs could ease pressure on consumers and businesses while giving the Federal Reserve more room to assess inflation without responding to another sustained surge in fuel prices. Still, shipping through the Strait of Hormuz remained disrupted, and the temporary pause in fighting did not guarantee a lasting diplomatic settlement. Energy markets are therefore likely to remain sensitive to any renewed military activity or progress toward negotiations.
Fed Decision and Big Tech Earnings Take Center Stage
Investors are preparing for one of the busiest weeks of the quarter, with the Federal Reserve scheduled to announce its latest interest-rate decision Wednesday. Most economists expect policymakers to leave rates unchanged, though persistent inflation concerns and recent volatility in energy prices have made the outlook less predictable.
The market is also bracing for results from Microsoft, Meta, Apple, and Amazon. Capital spending will be closely scrutinized after Alphabet and Tesla triggered a technology sell-off by outlining aggressive investment plans. With the largest technology companies accounting for a historically large share of the S&P 500, disappointment from even a handful of names could put pressure on the broader index. Investors will be looking for evidence that AI-related spending is translating into meaningful revenue growth rather than simply driving costs and debt higher.
Looking Ahead
This week’s Federal Reserve decision and megacap technology earnings could determine whether the market stabilizes or extends its recent pullback. Updates on AI capital expenditures, cloud demand, profit margins, and monetization will be especially important after Monday’s chip-sector decline. Oil prices and developments in the Middle East will remain another major source of volatility. A durable de-escalation could relieve inflation pressure and support stocks, but renewed conflict or disappointing technology results could quickly reverse Monday’s initial optimism.