Semiconductor Weakness Caps Early Rally as Falling Oil Prices Lift Broader Market

Stocks gave back most of their early gains on Monday as renewed weakness in semiconductor shares offset broad-based strength fueled by a sharp decline in oil prices. The S&P 500 finished little changed after opening firmly higher, while the Nasdaq Composite slipped 0.2%. The Dow Jones Industrial Average outperformed, rising 0.5%.

Semiconductor stocks remained the market’s primary headwind despite improved sentiment across Asian technology markets overnight. The information technology sector declined 1.0%, while the Philadelphia Semiconductor Index fell 2.2% as selling persisted across memory-chip and AI infrastructure companies.

NVIDIA was the biggest drag among the “Magnificent Seven,” falling 5.0% and highlighting the continued influence of semiconductor stocks on the broader market. The sector has remained at the center of recent trading activity, with investors continuing to rotate in and out of AI-related names following an extended period of outsized gains.

The weakness in chipmakers contrasted sharply with strength elsewhere in technology. Apple climbed 1.2% to another record high, while software stocks staged an impressive rebound. The iShares Expanded Tech-Software Sector ETF advanced 3.3%, with several software companies ranking among the day’s strongest performers in the S&P 500.

Beneath the surface, market participation remained encouraging despite the mixed finish among the major indexes. The equal-weighted S&P 500 gained 0.7%, comfortably outperforming its market-cap-weighted counterpart. Smaller companies also participated in the advance, with the Russell 2000 rising 0.7% and the S&P MidCap 400 adding 0.3%. Seven of the eleven S&P 500 sectors closed higher, underscoring that the day’s weakness remained concentrated in a relatively small group of large-cap semiconductor stocks.

Communication services was among the leading sectors, advancing 1.5% as Alphabet rebounded 2.3% from last week’s post-earnings decline. Consumer staples gained 1.6%, while financials rose 1.0%, reflecting continued rotation into sectors outside of technology.

Consumer discretionary added 0.8%, although Tesla continued to weigh on the group after extending its post-earnings decline with another 1.2% loss.

Energy was the market’s weakest sector, falling 2.0% after crude oil prices posted their sharpest decline in weeks. WTI crude oil futures dropped $6.69, or 7.5%, to settle at $82.65 per barrel after Bloomberg reported that President Trump said there was a “good chance” of reaching an agreement with Iran. The comments followed earlier reports that the United States had halted military strikes, easing concerns about potential supply disruptions in the region.

Despite the broad decline across energy stocks, Baker Hughes stood out with a 5.8% gain after reporting better-than-expected quarterly results.

Looking ahead, investors are preparing for one of the busiest weeks of the second-quarter earnings season. Several members of the “Magnificent Seven” are scheduled to report results, while key inflation data and Wednesday’s Federal Reserve policy announcement will provide important updates on the outlook for interest rates. Although semiconductor stocks continue to dominate day-to-day market movements, Monday’s trading suggested that underlying market breadth remains healthy, with strength extending well beyond the technology sector.

FTinvest 11 slipped 0.19% to close at 1,065.86, extending its recent consolidation following the record highs reached earlier this month. Despite the modest decline, the portfolio remains comfortably above the 1,000 level and is approximately 2.8% below its all-time closing high of 1,096.33, continuing to trade within close range of its peak.

FTinvest 11 is now up approximately +14.85% year-to-date, maintaining a strong double-digit return for 2026. The recent sequence of modest declines has done little to alter the portfolio’s impressive performance this year, with FTInvest 11 continuing to retain the vast majority of the gains achieved during July’s powerful rally. Its disciplined, value-driven investment strategy remains focused on long-term capital appreciation while navigating normal short-term market fluctuations.