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The S&P 500 and Nasdaq Composite fell on Monday, driven by declines in Big Tech companies like Alphabet, Amazon, and Microsoft, and continued volatility from SpaceX. Meanwhile, the Dow Jones Industrial Average rose, buoyed by a strong performance from Caterpillar. Investors are also monitoring ongoing U.S.-Iran negotiations impacting oil prices and anticipating key inflation data from the Federal Reserve later this week.
U.S. equities experienced a mixed day on Monday, with the S&P 500 and Nasdaq Composite closing lower, primarily weighed down by significant declines in major technology stocks and the recent volatility of SpaceX. In contrast, the Dow Jones Industrial Average managed to eke out gains, bolstered largely by a strong performance from Caterpillar.
The broad market S&P 500 fell 0.37% to 7,472.79, while the tech-heavy Nasdaq Composite declined a steeper 1.32%, ending at 26,166.60. The Dow Jones Industrial Average, however, added 148.01 points, or 0.29%, to 51,712.71, with Caterpillar contributing nearly 4% to its rise.
Major technology giants were a primary drag on the market. Alphabet shares dropped 5% amid concerns over artificial intelligence talent departures to rivals like Anthropic and OpenAI. Amazon and Meta Platforms also saw notable losses, falling 4.8% and 2.3% respectively, while Microsoft shares declined 3%.
SpaceX, which recently debuted on Nasdaq, continued its volatile trajectory, falling 16% on Monday for its third consecutive daily decline. The stock, which rallied nearly 50% from its IPO price of $135 in its initial three sessions, has since tumbled over 16% in its last three. Retail investors, according to Vanda Research, bought more SpaceX last week than any other Magnificent Seven stock, treating it as a long-term holding rather than a meme stock. Despite current volatility, some investors, like Hightower's Stephanie Link, remain bullish on its long-term potential, citing its dominant launch business, Starlink growth, and AI initiatives.
Outperforming the market were several chipmakers, including Micron Technology, which surged almost 7% ahead of its quarterly report. Advanced Micro Devices and Intel also posted gains of over 2% and 5%, respectively. Super Micro Computer jumped nearly 14% after announcing the delivery of its Data Center Building Block Solutions Blueprint based on the Nvidia Vera Rubin NVL4 platform.
Geopolitical developments significantly impacted oil markets. Brent oil futures turned negative on news that U.S. and Iranian officials had agreed on a 60-day roadmap to a final deal during talks in Switzerland. Brent crude futures for August closed 3.31% lower at $77.90 a barrel, and U.S. West Texas Intermediate futures for July fell 2.32% to $74.82. The U.S. Treasury Department also authorized the sale of Iranian oil for 60 days, contributing to the decline.
Investors are also keenly awaiting Thursday's release of May's personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge. Following last week's hawkish Fed meeting, expectations for an interest rate hike have shifted earlier, with some predicting an increase as soon as October.
Beyond the tech sector, other areas of the market saw notable movements:
- Communication Services: The S&P 500 communication services sector experienced its largest one-day slide since April 2025, falling almost 4%. Alphabet and Fox led the declines, while Warner Bros. Discovery and AT&T saw modest gains.
- Small Caps Surge: The small-cap-focused Russell 2000 climbed about 1% to a record high, surpassing 3,000 for the first time ever, suggesting investors are broadening their exposure beyond mega-cap stocks.
- Defense Stocks Dip: Defense contractors like Lockheed Martin, L3Harris Technologies, and Northrop Grumman slid following reports that President Trump summoned them to the White House to discuss munitions shortages.
- CVS Health Rallies: CVS Health shares hit a 52-week high, rising 4%, after unveiling an integrated GLP-1 support program aimed at competing with online pharmacies.
- Rare Earths in Focus: China imposed export controls on Pentagon-backed MP Materials and USA Rare Earth, key players in the domestic rare earth supply chain.
- Mergers & Acquisitions: Apogee Therapeutics soared almost 50% after AbbVie announced its acquisition for approximately $10.9 billion. Global building materials company CRH is set to acquire Texas-based Arcosa in an $8.5 billion deal.
- Energy Partnerships: Chevron is set to supply natural gas to Microsoft's Project Kilby data center in West Texas under a 20-year agreement.
Internationally, European stocks largely finished higher, with the pan-European Stoxx 600 up 0.7%, as investors reacted to the U.S.-Iran talks. However, the pound dipped against the dollar and gilt yields were largely unchanged after UK Prime Minister Keir Starmer announced his resignation. Asia markets closed mixed, with Japan's Nikkei 225 hitting a new record high, while Korean Air shares fell due to integration costs for its unit, Asiana.
