U.S. stocks finished mixed on Monday. Rising supply and transport risks in the Middle East pushed WTI crude up 2.06%, sending energy shares to the front of the S&P 500. At the same time, storage-chip and optical-communications stocks fell across the board, pulling the Nasdaq lower as the Philadelphia Semiconductor Index dropped nearly 2.7%. Meta rose more than 3% after releasing its Muse Wonder model, and Microsoft added more than 1% after introducing a new in-house AI chip. Later in the day, investors were set to watch a wave of third-quarter earnings from major U.S. banks, while Apple was due to hold a product event.
Indexes split as chip stocks slide
The Dow Jones Industrial Average rose 0.38% to 51,850.55. The S&P 500 slipped 0.06% to 7,807.24, while the Nasdaq fell 0.44% to 27,245.90. The VIX climbed 2.49% to 15.21.
Nine of the S&P 500’s 11 sectors closed higher. Energy gained 1.48%, and both consumer staples and communication services rose more than 1%. Information technology fell 0.9%, and consumer discretionary lost 0.7%, the only two sectors in the red. The headline indexes moved only modestly, but selling pressure inside tech was heavier. The Philadelphia Semiconductor Index fell nearly 2.7% to 12,236.79, marking a three-week low.
Among the Magnificent Seven, Meta rose 3.38%, Apple gained 1.31%, Microsoft added 1.12%, and Alphabet A rose 0.31%. Tesla fell 1.22%, Nvidia lost 1.21%, and Amazon dropped 1.08%.
The Nasdaq Golden Dragon China Index fell 0.34% to 5,734.06.
The U.S. Treasury cash market was closed for Columbus Day, so there were no fresh closing yield readings on Monday. On the most recent trading day, the 2-year Treasury yield stood at 4.789% and the 10-year yield was 5.243%.
Oil rally puts energy stocks in focus
WTI crude futures rose $1.89 to settle at $93.74 a barrel, up 2.06%. Brent crude gained $1.93 to settle at $106.65 a barrel, up 1.84%. COMEX gold futures fell 0.48% to $4,195.90 an ounce, while spot gold pulled back to around $4,170. Bitcoin traded around $81,200 and Ether around $2,420.
Since the weekend, airports, oil tankers, and transport routes in the Middle East have come under attack, reviving concerns over a disruption in crude supply. Russian diesel exports may increase, but that would not make up for a Middle East supply gap in the short term. Brent’s settlement price rose to its highest level since Sept. 15.
Higher oil prices also added to market concern over inflation and interest rates. Cleveland Fed President Hammack said the Federal Reserve should move relatively quickly toward a more restrictive policy stance. CME FedWatch showed the market pricing the probability of at least a 25-basis-point rate hike in October at close to 22%, up from 17.7% on Friday.
That made energy the strongest group on Monday, with Exxon Mobil and Chevron both up nearly 2%.
Storage and optical names retreat
Technology hardware was the main area of selling. Micron fell 3.9%, SanDisk dropped nearly 6%, SK Hynix and Super Micro Computer both lost more than 4%, and Seagate fell more than 3%. ChangXin Memory Technologies disclosed progress in next-generation memory technology, adding to market concern that competition in the storage segment could intensify.
Losses were even steeper in optical communications. Ciena fell 10%, Lumentum dropped 9.8%, Coherent lost 7.9%, Corning fell 6%, Lumen dropped 4.3%, Marvell lost 3.4%, and Cisco fell 2.6%. These stocks had rallied in previous sessions on expectations tied to AI data-center demand and orders, but Monday brought a broad round of profit-taking.
Nvidia and Cisco also announced a new USFP pluggable optical interconnect solution on the day, targeting transmission speeds of 400Gb/s per lane and aiming to improve front-panel bandwidth density and energy efficiency. The new technology path, however, did not reverse the sector’s pullback.
Meta and Microsoft outperform
Meta rose 3.38%, ending a four-session losing streak. The company released two models, Muse Wonder and Muse Wonder Full, with a focus on agents, programming, and complex professional tasks.
Muse Wonder is already available to developers through the Meta Model API and Muse Code. Muse Wonder Full is available to Muse Code subscribers. Meta said Muse Wonder will later be integrated into the Muse app in stages, starting with subscribers.
Microsoft rose 1.12%, taking its market value back above $4 trillion. The company introduced its new in-house AI inference chip, Maia 300, and said it plans to deploy the chip at scale starting next year, with potential deployment exceeding 1 million units to support Microsoft’s internal AI services and the Azure platform.
Microsoft said Maia 300 can deliver about 40% more effective compute per megawatt than leading GPU systems, though it did not identify the comparison target.
What the market is watching next
Major U.S. banks were scheduled to release third-quarter results later in the day. JPMorgan Chase and Wells Fargo were expected around 19:00 Beijing time, Goldman Sachs around 19:30, and Citigroup around 20:00. Investors were set to focus on net interest income, provisions for loan losses, deposit costs, and performance in investment banking and trading.
Apple was also due to hold its product event later in the evening. The company was scheduled to host its "Welcome Home" event at 21:00 Beijing time. The market expected Apple to unveil a smart home hub, a new HomePod mini, and updated Apple TV products, though final products and pricing were to be confirmed at the event.