Stocks started the week on a muted note, with the S&P 500 (-0.1%), Nasdaq Composite (-0.3%), and DJIA (-0.1%) finishing modestly lower amid a surge in oil prices and a late retreat across select tech names.

Rising oil prices weighed on the market at the open and continued to climb throughout the day, with crude oil futures settling today's session $3.98 higher (+5.1%) at $82.17 per barrel. President Trump said that the U.S. will give Iran time to face mounting economic pressure amid the inability to reach a lasting deal, while Iran reiterated that reopening the Strait of Hormuz is contingent on the U.S. permanently ending the conflict and paying reparations.

The spike in oil prices sent Treasury yields higher across the curve, weighing on oil- and rate-sensitive areas of the market. The real estate (-1.2%) and utilities (-1.1%) sectors were the worst-performing S&P 500 groups, while the iShares U.S. Home Construction ETF fell 2.7% and the Russell 2000 (-0.6%) underperformed the major averages.

However, the broader market weathered the oil-driven pressure relatively well, with mixed sector strength keeping losses muted at the index level. Outside of the energy sector (+4.6%), the health care sector (+1.5%) outperformed, with Vertex Pharma (VRTX 523.91, +27.84, +5.61%) surging after competitor Sionna Therapeutics (SION 4.50, -46.54, -91.18%) halted development of a cystic fibrosis treatment following disappointing Phase 2a results.

The materials sector (+0.7%) also posted a decent gain as precious metals prices continued to move higher, while positive showings from Alphabet (GOOG 355.84, +2.37, +0.67%) and Meta Platforms (META 594.92, +2.82, +0.48%) helped outweigh lingering post-earnings weakness in The Trade Desk (TTD 13.39, -0.41, -2.97%) within the communication services sector (+0.7%).

Meanwhile, the information technology sector (-1.1%) faced pressure as semiconductor stocks weakened throughout the session. The PHLX Semiconductor Index fell 2.9%, closing at a session low as some profit-taking followed last week's strong rebound. NVIDIA (NVDA 217.56, -6.40, -2.86%) contributed to the late weakness, sliding to session lows after the Financial Times reported that the company is working with a host of large asset managers on financing platforms aimed at mobilizing more than $500 billion for AI infrastructure development.

Intel (INTC 97.52, -4.13, -4.06%) also weighed on the chipmaker index after announcing a $15 billion underwritten common stock offering, while Apple (AAPL 308.26, -5.07, -1.62%) lagged after Jefferies downgraded the stock to Underperform from Hold.

Software stocks provided a notable counterweight to the weakness in semiconductors. The iShares GS Software ETF (IGV) climbed 2.3%, helping limit the information technology sector's decline despite the late selling across chipmakers.

Even with late weakness in technology and a sharp rise in oil prices, the major averages finished only modestly lower, remaining near last week's record highs and reflecting some underlying strength following a strong Q2 earnings season.

With earnings beginning to wind down, the market's next test of sentiment looms with Wednesday's release of the July Consumer Price Index (Briefing.com consensus 0.1%), which will likely be influential in the Fed's next policy decision. The CME FedWatch tool now assigns a 51.7% probability of a rate hike at the September FOMC meeting, up from 44.4% on Friday but down from 67.2% a week ago.

U.S. Treasuries retreated to begin the week, lifting yields on the 5-year note and longer tenors to one-week highs while the 2-year note reversed its decrease from Friday, staying just above its 50-day moving average (4.186%). The 2-year note yield settled up three basis points to 4.24%, and the 10-year note yield settled up four basis points to 4.70%. 

There was no economic data of note. 

• Russell 2000: +21.6% YTD
• S&P Mid Cap 400: +17.1% YTD
• Nasdaq Composite: +14.5% YTD
• S&P 500: +13.3% YTD
• DJIA: +12.3% YTD