The major averages finished near their session lows as technology stocks extended their recent weakness and another sharp surge in crude oil prices reinforced two of the market's dominant themes from last week. The S&P 500 (-0.8%), Nasdaq Composite (-1.6%), and DJIA (-0.3%) all finished lower, with the technology-heavy Nasdaq bearing the brunt of the selling pressure.

Semiconductor stocks remained at the center of today's weakness, with the information technology sector (-2.1%) finishing near its session low as the PHLX Semiconductor Index fell 4.8. The group's recent trading has been notably volatile, though the short-term trend has turned increasingly negative, leaving the semiconductor benchmark down over 13% since the start of July.

Memory names such as Sandisk (SNDK 1673.97, -241.95, -12.63%) were among the weakest performers after SK hynix Inc. (SKHY 152.35, -15.66, -9.32%) pulled back following Friday's strong Nasdaq ADR debut.

Taiwan Semiconductor Manufacturing (TSM 421.58, -12.53, -2.89%) held up relatively well after reporting another month of robust revenue growth. Elsewhere in technology, Microsoft (MSFT 390.99, +5.89, +1.53%) outperformed its mega-cap peers, though it did little to offset broader weakness across the group.

The technology-led selling spilled into other growth-oriented areas of the market, pressuring the consumer discretionary (-0.7%) and communication services (-1.0%) sectors. The Vanguard Mega Cap Growth ETF fell 1.5%, while the market-weighted S&P 500 (-0.8%) significantly underperformed the S&P 500 Equal Weight Index (-0.1%), underscoring the outsized influence of the market's largest technology companies.

Geopolitical developments added another headwind as crude oil climbed steadily throughout the session. U.S. Central Command announced that forces will resume blockading maritime traffic entering and exiting Iranian ports beginning July 14 at 4:00 p.m. ET. WTI crude oil futures settled up $6.73 (+9.4%) at $78.42 per barrel, lifting the energy sector (+3.2%) well ahead of the broader market as Valero Energy (VLO 295.79, +15.10, +5.38%) and Diamondback Energy (FANG 191.60, +8.21, +4.48%) ranked among the S&P 500's top performers. Even so, the broader impact of higher energy prices weighed on sentiment.

Outside of energy, investors rotated toward more defensive areas of the market. The consumer staples (+0.6%), utilities (+0.7%), health care (+0.3%), and real estate (+0.5%), sectors all finished higher.

The financials sector (+0.6%) also advanced despite modest weakness across several large banks ahead of tomorrow's slate of earnings reports.

The Russell 2000 (-0.8%) and S&P Mid Cap 400 (-0.6%) finished with losses similar to those of the major averages.

Today's action reinforced the market's recent tendency to swing alongside semiconductor stocks and oil prices, with renewed geopolitical tensions overwhelming the rotational buying interest that emerged earlier in the session. Attention now shifts to tomorrow's June CPI report and the unofficial start of second-quarter earnings season, where inflation data and guidance from several major banks are likely to determine whether those themes continue to dominate or give way to a broader set of market catalysts.

U.S. Treasuries began the week with losses across the curve, sending yields on the 5-year note and shorter tenors to fresh closing highs for the year while yields on the 10-year and 30-year notes approached their highs from May. The 2-year note yield settled up five basis points to 4.26%, and the 10-year note yield settled up four basis points to 4.61%.

• Russell 2000: +19.0% YTD
• S&P Mid Cap 400: +13.7% YTD
• Nasdaq Composite: +11.3% YTD
• S&P 500: +9.8% YTD

Reviewing today's data:

• The Treasury Department reported a $120.3 billion deficit for June versus a surplus of $27.0 billion for the same period in June 2025. Receipts totaled $495.8 billion, while outlays reached $616.1 billion.
  • The key takeaway from the report is the recognition that tariff refunds are cutting into government receipts at the same time the amount spent on net interest is going up. The results is a 12-month budget deficit that exceeds the 12-month deficit registered in May.