Stocks Edge Lower as Oil Surge and Late Tech Weakness Temper Market Momentum

Stocks started the week on a subdued note Monday, as surging oil prices, rising Treasury yields, and late weakness across select technology stocks kept the major averages under modest pressure. The S&P 500 slipped 0.1%, the Nasdaq Composite declined 0.3%, and the Dow Jones Industrial Average lost 0.1%, leaving the major indices close to last week’s record levels.

Oil prices provided the session’s primary headwind. WTI crude futures climbed $3.98, or 5.1%, to settle at $82.17 per barrel as geopolitical uncertainty surrounding the U.S.-Iran conflict remained elevated. President Trump said the U.S. would give Iran additional time to face mounting economic pressure amid the inability to reach a lasting agreement. Iran, meanwhile, reiterated that reopening the Strait of Hormuz remains contingent on the U.S. permanently ending the conflict and paying reparations.

The sharp increase in crude prices pushed Treasury yields higher across the curve, creating pressure for interest rate-sensitive areas of the market. Real estate (-1.2%) and utilities (-1.1%) were the two weakest S&P 500 sectors, while the iShares U.S. Home Construction ETF fell 2.7%. Smaller companies also underperformed, with the Russell 2000 declining 0.6%.

Despite those headwinds, the broader market absorbed the oil-driven pressure relatively well. Sector performance remained mixed, helping keep losses at the index level contained.

Energy was the clear beneficiary of the jump in crude prices, surging 4.6% to finish comfortably atop the S&P 500 sector leaderboard. Health care also outperformed with a 1.5% gain. Vertex Pharmaceuticals (VRTX 523.91, +27.84, +5.61%) rallied after competitor Sionna Therapeutics (SION 4.50, -46.54, -91.18%) halted development of a cystic fibrosis treatment following disappointing Phase 2a results.

Materials advanced 0.7% as precious metals prices continued to strengthen. Communication services also gained 0.7%, supported by Alphabet (GOOG 355.84, +2.37, +0.67%) and Meta Platforms (META 594.92, +2.82, +0.48%), which helped offset lingering post-earnings weakness in The Trade Desk (TTD 13.39, -0.41, -2.97%).

Technology was one of the session’s primary weak spots. The information technology sector fell 1.1% as semiconductor stocks came under renewed selling pressure following last week’s powerful rebound. The PHLX Semiconductor Index dropped 2.9% and closed near its session low as investors took profits across several of the group’s recent winners.

NVIDIA (NVDA 217.56, -6.40, -2.86%) contributed to the late weakness after the Financial Times reported that the company is working with several large asset managers on financing platforms designed to mobilize more than $500 billion for AI infrastructure development.

Intel (INTC 97.52, -4.13, -4.06%) also weighed on the semiconductor group after announcing a $15 billion underwritten common stock offering. Apple (AAPL 308.26, -5.07, -1.62%) added to the pressure on mega-cap technology after Jefferies downgraded the shares to Underperform from Hold.

Software stocks provided an important counterweight to semiconductor weakness. The iShares Expanded Tech-Software Sector ETF gained 2.3%, continuing the recent rotation within technology and helping limit the information technology sector’s overall decline.

Monday’s relatively modest losses were notable given the magnitude of the increase in crude oil and the accompanying rise in Treasury yields. Even with semiconductor stocks weakening into the close, the major averages remained near last week’s record highs, suggesting that underlying market sentiment remains relatively resilient following a strong second-quarter earnings season.

With earnings season beginning to wind down, attention now shifts toward Wednesday’s July Consumer Price Index report. The Briefing.com consensus calls for a 0.1% monthly increase, making the release potentially important for expectations surrounding the Federal Reserve’s next policy move.

The CME FedWatch Tool currently assigns a 51.7% probability to a rate hike at the September FOMC meeting, up from 44.4% on Friday but still below the 67.2% probability seen one week ago. With oil prices once again adding to inflation concerns, Wednesday’s CPI report could become the market’s next major catalyst and help determine whether the Fed can remain on hold or will need to resume tightening.

Our FTinvest 11 model portfolio was virtually unchanged, declining 0.01% to close at 1,062.98. The portfolio continues to trade in a narrow range following the strong rally and record highs reached in July. It remains comfortably above the 1,000 level and approximately 3.0% below its all-time closing high of 1,096.33.

FTinvest 11 is now up approximately +14.52% year-to-date, maintaining a strong double-digit return for 2026. Recent sessions have been characterized by unusually small daily moves, suggesting a period of consolidation after the substantial recovery from June’s volatility. Despite the quieter price action, FTInvest 11 continues to preserve most of its gains and remains relatively close to record territory, consistent with its disciplined, value-driven focus on long-term capital appreciation.