Dow rises as tech stocks drag S&P 500 lower ahead of Nvidia results

• Treasury yields declined, with the 10-year falling to 4.69% and 30-year to 5.216%, as markets await Fed Chair Warsh's Jackson Hole speech Friday and July PCE inflation data Wednesday
• Semiconductor sector sold off sharply ahead of Nvidia earnings, with concerns about AI demand and political opposition to data centers after Texas Governor Abbott paused new data center approvals over grid concerns
• Geopolitical risks added pressure as Trump announced tariffs on Canadian auto imports starting January 2027 and the administration threatened expanded secondary sanctions on countries trading with Iran

Market Summary: Tech Weakness Offsets Dow Gains Ahead of Nvidia Earnings

Key Market Movements

US equities closed mixed on Monday, with the Dow Jones rising 0.26% to 53,416.99, while the S&P 500 fell 0.28% to 7,652.96 and the Nasdaq dropped 0.76% to 25,980.19. Technology and semiconductor stocks led the decline.

Sector Performance

Semiconductor stocks experienced significant pressure, with the SOXX index falling 2%. Micron Technology plummeted over 5%, while AMD declined 3% and Broadcom dropped 2%. Other tech names saw similar weakness: SanDisk and Seagate fell 6%, while Coherent and Lumentum declined 4% each.

Financial stocks supported the Dow, with JPMorgan Chase and Visa posting gains.

Key Catalysts

Markets are focused on Nvidia's quarterly earnings report due Wednesday, viewed as a critical test for AI-related investments and broader market valuations. Political headwinds emerged as Texas Governor Greg Abbott paused approvals for new data center projects due to grid reliability concerns.

Fixed Income & Policy

Treasury yields declined, with the 10-year yield falling 4 basis points to 4.69% and the 30-year dropping 6 basis points to 5.216%. Investors await Fed Chair Kevin Warsh's Jackson Hole speech Friday and July PCE inflation data Wednesday. Markets currently price in one 25-basis-point rate hike by end-2026.

Geopolitical Risks

The Trump administration announced potential expanded sanctions against countries trading with Iran, while tariffs on Canadian auto and steel imports are set for January 1, 2027, after failed trade negotiations. These developments add inflation and supply chain uncertainties.

Market Outlook: Investor focus remains on whether Nvidia's results and inflation data can offset technology valuation concerns and geopolitical headwinds.