Stocks finished mixed on Monday as another sharp retreat across semiconductor stocks weighed on the technology-heavy averages, while strength across much of the broader market helped the DJIA (+0.3%) buck the negative trend. The S&P 500 (-0.3%) posted a modest loss, while the Nasdaq Composite (-0.8%) underperformed.

Semiconductors remained at the center of the weakness throughout the session. The PHLX Semiconductor Index fell 2.7%, extending its recent pullback and leaving the information technology sector (-1.6%) at the bottom of the sector standings. Memory and semiconductor-component stocks were among the laggards following another weak showing in Asian markets, while NVIDIA (NVDA 208.46, -6.26, -2.92%) remained under pressure ahead of its earnings report Wednesday after the close, extending its losing streak to seven consecutive sessions.

Related weakness spilled into the industrials sector (-0.7%), where electronic equipment names remained under pressure alongside the semiconductor trade. Caterpillar (CAT 811.02, -16.88, -2.04%) and Boeing (BA 210.46, -3.74, -1.75%) were additional drags, while aerospace and defense stocks also struggled.

The losses in those areas contrasted with a considerably firmer showing across most of the market. Eight S&P 500 sectors finished higher, allowing the S&P 500 Equal Weighted Index (+0.1%) to outperform its market-cap-weighted counterpart.

The consumer staples sector (+1.8%) led the way as Walmart (WMT 106.49, +2.79, +2.69%) rebounded from its post-earnings weakness, while the financials sector (+1.2%) also posted a solid gain, with major banking and payment names contributing to the DJIA's outperformance.

Strength in Alphabet (GOOG 344.59, +2.84, +0.83%) and Meta Platforms (META 559.02, +9.12, +1.66%) helped the communication services sector (+1.0%) outperform as well.

Another decline in oil prices provided a favorable backdrop for many consumer and other oil-sensitive stocks. WTI crude settled $2.09 lower (-2.4%) at $84.98 per barrel, leaving the energy sector (-0.8%) among the relatively few groups to finish lower. Treasury yields also declined, providing additional relief for rate-sensitive areas following the recent volatility in longer-term rates. The afternoon brought the formal launch of the Trump administration's new economic pressure campaign against Iran, dubbed "Operation Economic Outcast." Treasury Secretary Scott Bessent outlined plans targeting Iran-linked entities, brokerage networks, shadow-fleet vessels, and several critical sectors, while also warning of potential consequences for countries that continue cooperating with Iran. Bessent characterized the initial measures as a "warning shot," but stocks and oil prices showed little reaction to the announcement.

Despite the more constructive backdrop from lower oil prices and Treasury yields, strength did not extend evenly across the market. The Russell 2000 (-0.8%) and S&P MidCap 400 (-0.8%) underperformed the large-cap benchmarks.

Monday's session ultimately reflected a sharp divide between continued weakness in semiconductor-related stocks and a much firmer showing elsewhere. Selling in chips was substantial enough to keep the S&P 500 lower and weigh heavily on the Nasdaq, but gains across eight S&P 500 sectors, along with lower oil prices and Treasury yields, helped limit the broader damage and allowed the DJIA to finish in positive territory.

U.S. Treasuries began the week with gains in longer tenors while the short end underperformed, finishing with a slim loss. The 2-year note yield settled up one basis point to 4.24% and the 10-year note yield settled down three basis points to 4.70%. 

There was no economic data of note today.

• Russell 2000: +20.7% YTD
• S&P Mid Cap 400: +15.0% YTD
• S&P 500: +11.8% YTD
• Nasdaq Composite: +11.8% YTD
• DJIA: +11.1% YTD