Stocks Wobble as Oil Volatility and Tech Weakness Offset Broader Market Strength

The stock market began the week on uncertain footing as weakness across technology and semiconductor stocks weighed on the major averages, while shifting headlines surrounding U.S.-Iran negotiations fueled volatility in oil markets throughout the session.

The S&P 500 slipped 0.1%, while the Nasdaq Composite lost 0.5%. The Dow Jones Industrial Average managed to outperform with a 0.3% gain, supported by rotational buying into financials, consumer staples, and real estate shares.

Energy markets remained the central macro focus. Crude oil prices swung sharply during the day as investors reacted to conflicting reports regarding negotiations between the U.S. and Iran. Early optimism tied to potential sanctions relief and reports of a revised peace proposal briefly pressured oil lower, but later headlines suggested both sides remain far apart on key issues.

Crude oil futures ultimately settled 3.1% higher near $109 per barrel before easing late in the session after Donald Trump stated on Truth Social that planned military strikes against Iran had been called off because “serious negotiations are now taking place.”

That late-session development helped equities rebound from their intraday lows, though technology shares still closed firmly lower.

The information technology sector fell 1.0%, making it the weakest-performing sector of the session despite recovering nearly half of its earlier losses. Semiconductor stocks remained under pressure following Friday’s sell-off, with the PHLX Semiconductor Index declining another 2.5%.

Memory and AI infrastructure names led the weakness. Seagate Technology dropped sharply after comments from management raised concerns about the company’s ability to scale production fast enough to meet surging demand for memory products. The cautious commentary spilled over into the broader memory and semiconductor space.

Meanwhile, Lumentum Holdings was among the market’s worst performers as electrical equipment and optical networking names continued to trade in tandem with semiconductor stocks. Weakness also spread to AI infrastructure-related industrial names such as Vertiv Holdings, weighing on the industrials sector.

Outside of technology, losses were comparatively mild. The consumer discretionary sector edged lower as Tesla lagged, while the materials sector finished just slightly negative.

Still, beneath the surface, broader participation across the market was notably healthier than the major indices suggested.

Seven of the eleven S&P 500 sectors closed in positive territory. The financials sector posted a strong gain, supported by continued momentum in financial services companies such as FactSet Research Systems. The consumer staples sector also rallied broadly, while the real estate sector rebounded after Friday’s yield-driven weakness.

The energy sector led the market higher as oil prices climbed.

Outside the large-cap benchmarks, the Russell 2000 underperformed amid weakness in growth-oriented stocks, while the S&P Mid Cap 400 finished only modestly lower.

One of the more notable developments from Monday’s session was the divergence between the market-weighted and equal-weighted benchmarks. The equal-weighted version of the S&P 500 outperformed significantly, highlighting improving breadth and rotational buying beneath the surface of the market.

That shift may offer some encouragement to investors who have increasingly questioned the sustainability of the market’s recent rally, which has been heavily concentrated in a small group of mega-cap and AI-related technology stocks.

Looking ahead, attention now turns squarely toward NVIDIA and its upcoming earnings report later this week. With AI enthusiasm continuing to drive much of the market’s momentum in recent months, the company’s results and guidance could play a decisive role in determining whether leadership across semiconductors and AI-linked names reaccelerates — or whether recent cracks in the trade begin to widen.

Our FTinvest 11 model portfolio rebounded 0.74% to close at 993.19, recovering part of Friday’s sharp decline and moving back toward the 1,000 level. The portfolio remains below its recent all-time high of 1,041.22, though today’s gain suggests some stabilization after last week’s heightened volatility.

FTinvest 11 is now up approximately +7.00% year-to-date, maintaining a solid positive return despite the recent pullback. The portfolio’s disciplined, value-driven strategy continues to support resilience as it navigates a more volatile market environment.