Dow falls 290 points as Nasdaq steadies on chip rebound, earnings focus

• Semiconductor stocks rebounded after last week's selloff that pushed the Philadelphia Semiconductor Index into bear market territory (down 20% from June highs); Micron, Astera Labs, and Teradyne all posted gains
• Analysts raised Q2 S&P 500 earnings growth expectations to 26% year-over-year from 23.7%, with major tech earnings this week expected to determine if chip weakness is temporary or signals broader sentiment shift
• Oil remained elevated with US crude at $83/barrel and Brent at $89 amid ongoing US strikes on Iran (ninth consecutive day) and Yemen's Houthi naval blockade on Saudi Arabia threatening energy supplies

Market Summary: Dow Falls on Mixed Trading Day Amid Chip Rebound and Earnings Focus

Market Performance:

U.S. stocks closed mixed on Monday, with the Dow Jones Industrial Average falling 297 points (-0.57%) to 51,848.96. The S&P 500 declined 0.18% to 7,444.19, while the Nasdaq Composite edged down just 0.04% to 25,510.27.

Semiconductor Sector Rebounds:

Chip stocks recovered from last week's sharp selloff, providing support to the Nasdaq. Micron Technology gained over 1%, Astera Labs rose 2%, and Teradyne advanced 3%. The VanEck Semiconductor ETF posted modest gains. This rebound follows the Philadelphia Semiconductor Index entering bear market territory last week, closing more than 20% below its late-June record high.

Earnings Season Focus:

Analysts now expect S&P 500 companies to post 26% year-over-year earnings growth for Q2, up from the earlier 23.7% estimate. Major tech earnings from Alphabet, Tesla, Intel, and Texas Instruments are scheduled this week, with investors seeking confirmation of resilient semiconductor demand and AI-related business strength.

Geopolitical Tensions:

U.S.-Iran conflict remained a key concern, with the U.S. conducting its ninth consecutive day of strikes. Yemen's Houthis announced a naval blockade on Saudi Arabia, raising energy supply concerns. Oil prices remained elevated, with U.S. crude around $83 per barrel and Brent near $89.

Individual Movers:

Alphabet gained on news of developing custom AI chips with Broadcom, integrating Gemini technology directly into chip architecture. Domino's Pizza fell after CLSA initiated coverage with a Hold rating, citing $500 billion capital requirements through 2030.

Market Outlook:

Corporate guidance, particularly from AI and semiconductor companies, will be critical in determining whether recent tech weakness represents a temporary correction or broader sentiment shift.