Tech Selloff and Oil Spike Weigh on Stocks Ahead of CPI and Bank Earnings

Stocks closed near their session lows on Monday as renewed weakness in semiconductor shares and a sharp jump in oil prices pressured investor sentiment. The S&P 500 fell 0.8%, the Nasdaq Composite declined 1.6%, and the Dow Jones Industrial Average slipped 0.3%, with the technology-heavy Nasdaq once again bearing the brunt of the selling.

Semiconductor stocks remained at the center of the market’s weakness. The information technology sector dropped 2.1%, while the Philadelphia Semiconductor Index tumbled 4.8%, extending its recent slide. After several highly volatile sessions, the index is now down more than 13% since the beginning of July, reflecting growing profit-taking across AI-related names.

Memory-chip stocks led the decline. Sandisk plunged 12.6%, while SK hynix fell 9.3% following Friday’s strong Nasdaq ADR debut. Taiwan Semiconductor Manufacturing held up comparatively well after reporting another month of robust revenue growth, highlighting that investors remain willing to reward strong fundamentals even as sentiment toward the sector weakens.

Among the mega-cap technology names, Microsoft stood out with a 1.5% gain, but its advance was not enough to offset widespread weakness elsewhere in the sector.

The technology-led selloff spilled over into other growth-oriented groups. Consumer discretionary lost 0.7%, while communication services fell 1.0%. The Vanguard Mega Cap Growth ETF declined 1.5%, and the market-cap-weighted S&P 500 significantly underperformed the equal-weighted S&P 500, which slipped just 0.1%, underscoring the outsized impact of the market’s largest technology companies.

Geopolitical developments added another layer of pressure. U.S. Central Command announced that maritime traffic entering and leaving Iranian ports would once again be blockaded beginning July 14, fueling renewed concerns about global energy supplies. WTI crude oil futures surged $6.73, or 9.4%, to settle at $78.42 per barrel.

The sharp rise in crude prices made energy the day’s standout sector, climbing 3.2%. Valero Energy and Diamondback Energy ranked among the S&P 500’s top performers as investors rotated into oil producers.

Higher energy prices also encouraged a move toward defensive areas of the market. Consumer staples gained 0.6%, utilities advanced 0.7%, real estate rose 0.5%, and health care added 0.3%.

Financials also posted a respectable 0.6% gain despite modest weakness across several large banks ahead of Tuesday’s closely watched earnings reports.

Small- and mid-cap stocks were unable to escape the broader weakness. The Russell 2000 fell 0.8%, while the S&P MidCap 400 declined 0.6%.

Monday’s session highlighted two themes that have increasingly driven market direction in recent weeks: volatility in semiconductor stocks and sensitivity to movements in oil prices. With geopolitical tensions intensifying and technology leadership under pressure, investor attention now turns to Tuesday’s June Consumer Price Index report and the unofficial start of second-quarter earnings season. Inflation data and guidance from the nation’s largest banks are likely to determine whether the market remains focused on these macro themes or shifts its attention back toward corporate fundamentals.

Our FTinvest 11 model portfolio edged lower by 0.08% to close at 1,026.67, posting a nearly unchanged session as the portfolio continued to consolidate after its strong recovery in early July. The index remains comfortably above the 1,000 level and is approximately 4.8% below its all-time high of 1,078.93, indicating that most of the losses from the June correction have already been recouped.

FTinvest 11 is now up approximately +10.61% year-to-date, maintaining a solid double-digit return in 2026. The recent sideways trading suggests the portfolio is digesting its gains following a sharp rebound rather than showing signs of renewed weakness. FTInvest 11 continues to adhere to its disciplined, value-driven investment philosophy, focusing on long-term value creation while remaining resilient through periods of short-term market volatility.