U.S. stocks slipped on Monday as rising inflation concerns, climbing oil prices, and another jump in Treasury yields ahead of a pivotal week for the AI trade rattled markets. Markets struggled to hold early gains after renewed geopolitical tensions in the Middle East pushed energy prices sharply higher and reignited fears that inflation could remain elevated for longer than expected.
The Nasdaq Composite led losses, falling more than 1% as semiconductor and AI-related stocks came under pressure. The S&P 500 declined roughly 0.5%, while the Dow Jones Industrial Average slipped 0.2%. Investors are now closely watching Nvidia’s earnings report later this week, which is expected to serve as a major test for the sustainability of the AI-driven rally that has powered markets to record highs in recent months.
Market Movers:
- NextEra Energy (NEE) / Dominion Energy (D) — Shares of utility companies moved into focus after NextEra Energy announced a massive $66.8 billion all-stock deal to acquire Dominion Energy. If completed, the transaction would create the largest utility company in the United States and further accelerate consolidation across the energy infrastructure sector.
- Micron Technology (MU) -3% — Shares of the memory chipmaker fell amid concerns that a potential Samsung labor strike could worsen already-tight memory chip supplies. Investors also appeared cautious ahead of Nvidia earnings and broader volatility across AI-related semiconductor stocks.
- Seagate Technology (STX) -7% — Shares dropped sharply as traders worried that disruptions at Samsung could ripple through global storage and hardware supply chains. The company relies heavily on memory components tied to Samsung’s production ecosystem, making it especially vulnerable to supply shortages.
- Nvidia (NVDA) — Nvidia shares moved lower alongside the broader semiconductor sector as investors locked in profits ahead of the company’s highly anticipated earnings release on Wednesday. Wall Street is expected to closely scrutinize AI demand trends, margins, and data center spending commentary for clues about the next phase of the AI boom.
- Bitcoin Depot (BTM) — Shares and sentiment around crypto infrastructure weakened after Bitcoin Depot filed for Chapter 11 bankruptcy protection, citing mounting regulatory pressure and an unsustainable business model. The filing added to broader weakness across cryptocurrency-related assets as Bitcoin prices slid to a two-week low.
Oil Prices Keep Inflation Worries Elevated
Energy markets remained one of the key concerns as Brent crude rose above $110 per barrel and U.S. crude traded north of $102. Investors continued monitoring escalating tensions involving Iran after a weekend drone attack on a UAE nuclear facility added fresh uncertainty to global energy markets.
President Trump further intensified concerns after warning that the “clock is ticking” for Iran while simultaneously signaling openness to a temporary sanctions waiver tied to renewed negotiations. The conflicting geopolitical signals kept volatility elevated across commodities and raised fears that higher fuel prices could continue feeding inflation pressures throughout the global economy. The rise in oil has become increasingly important for investors after last week’s hotter-than-expected inflation reports fueled concerns that the Federal Reserve may keep interest rates elevated longer than markets had hoped.
Bond Yields and Inflation Concerns Pressure Markets
Treasury yields also remained near recent highs Monday, with the 10-year yield briefly climbing above 4.6% before easing slightly later in the session. The move higher in yields has become a major headwind for equities, particularly high-growth technology and AI stocks that are more sensitive to higher borrowing costs and tighter financial conditions.
Markets are now reassessing expectations for Federal Reserve policy after a series of stronger inflation readings suggested price pressures remain stubbornly persistent. Investors are increasingly worried that continued gains in energy and commodity prices could delay any path toward rate cuts and potentially force policymakers to maintain a more hawkish stance through the remainder of the year.
AI Trade Faces Another Key Test
This week’s biggest event for Wall Street remains Nvidia’s quarterly earnings report, which many investors view as the next major catalyst for the broader AI trade. The chipmaker has become one of the market’s most influential companies amid explosive spending on data centers, cloud infrastructure, and artificial intelligence development.
However, the sector is also facing new risks. Concerns surrounding semiconductor supply chains intensified Monday after reports that Samsung workers could move forward with a lengthy strike if negotiations fail. Because memory chips are critical components for AI servers, gaming systems, and consumer electronics, any prolonged disruption could create additional supply bottlenecks across the tech industry. At the same time, investors continue to monitor geopolitical tensions between the U.S. and China, which remain deeply intertwined with the future of AI hardware, semiconductor exports, and global manufacturing.
Looking Ahead
Markets now head into a key stretch defined by inflation concerns, geopolitical uncertainty, and high-stakes earnings from some of the biggest names in technology. Nvidia’s results later this week could either reignite enthusiasm around the AI trade or trigger further volatility if growth expectations fail to impress investors. Retail earnings from Walmart and Target will also offer fresh insight into the health of the U.S. consumer as rising fuel prices and elevated borrowing costs pressure household budgets. With Treasury yields still elevated and oil prices climbing, investors are likely to remain highly sensitive to any signs that inflation is becoming more entrenched across the economy.