Stocks opened with broad gains following Friday's sharp sell-off and a relatively quiet weekend on the Iran front. However, the major averages were unable to hold most of those gains amid pronounced weakness in semiconductor stocks and another day of sharply higher oil prices, ultimately leading to a mostly lower finish.

The Nasdaq Composite (-0.7%) lagged for most of the session amid the weakness in tech names, while the S&P 500 (-0.4%) moved lower in the afternoon, and strength in the broader market helped the DJIA (+0.1%) squeak out a modest gain. The smaller-cap Russell 2000 (-1.5%) and S&P Mid Cap 400 (-0.8%) moved lower earlier in the session, and finished with wider losses.

Much of the early strength in equities was attributed to a technical bounce in the wake of Friday's sell-off. All eleven S&P 500 sectors traded higher out of the gate, but losses across tech names quickly capped gains at the index level.

The top-weighted information technology sector (-1.5%) was one of the first S&P 500 sectors to move into negative territory as semiconductor stocks saw an extension of recent weakness. The PHLX Semiconductor Index finished 4.2% lower as names such as Micron (MU 321.80, -35.42, -9.92%) and Coherent (COHR 219.65, -23.83, -9.79%) were among the worst-performing S&P 500 names today.

It is worth noting that losses in the broader technology sector were somewhat lessened due to a strong showing from software stocks that sent the iShares GS Software ETF (IGV) 1.0% higher. ServiceNow (NOW 104.97, +5.56, +5.59%) was the top-performing S&P 500 component while Palo Alto Networks (PANW 154.35, +7.33, +4.99%) captured a similar gain after disclosing that its CEO purchased approximately $10 million worth of shares late Friday.

The industrials sector (-1.6%) was also a laggard today, while the energy sector (-0.9%) also finished lower despite crude oil futures settling today's session $3.41 higher (+3.4%) at $102.92 per barrel.

There was some early optimism on the geopolitical front after President Trump wrote on Truth Social that Iran has conceded most of the demands in the 15-point peace proposal that the U.S. set forth, though he did not provide details. Additionally, the same post included threats to destroy Iran's energy infrastructure if a deal is not struck soon. A lack of clarity and climbing oil prices kept the market's enthusiasm in check, while reports circulated late in the session that Israel's Air Force completed a wave of attacks on infrastructure sites in Tehran, suggesting a resolution remains distant.

However, the market received some encouraging news today regarding the Fed's view of the situation in Iran. Fed Chair Jerome Powell (voting FOMC member) said inflation expectations remain well anchored beyond the short term and noted that the Fed's tools do not have a meaningful impact on supply shocks. This commentary had a notable impact on market-implied rate expectations, with the probability of a rate hike later this year falling to around 5% from over 20% on Friday, according to the CME FedWatch Tool.

Corporate news flow was on the lighter side today, though there were a few notable moves. Sysco (SYY 69.30, -12.50, -15.28%) was the worst-performing S&P 500 component after agreeing to acquire Jetro Restaurant Depot in a $29.1 billion deal.

With tomorrow marking the final trading day of the quarter, positioning dynamics could come into focus. However, the major averages remain firmly below their 200-day moving averages, highlighting a still-challenged technical backdrop as oil prices continue to climb. 

Unlike stocks, U.S. Treasuries began the week with strong gains across the curve, bouncing off their lowest levels of the month ahead of tomorrow's final session of Q1. The 2-year note yield settled down nine basis points to 3.83%, and the 10-year note yield settled down 10 basis points to 4.34%. 

There was no economic data of note. 

• S&P Mid Cap 400: -0.7% YTD
• Russell 2000: -2.7% YTD
• DJIA: -5.9% YTD
• S&P 500: -7.3% YTD
• Nasdaq Composite: -10.5% YTD