The S&P 500 slipped 0.43%, while the Dow Jones Industrial Average edged up 0.19% and the Nasdaq 100 tumbled 1.41% to a three-week low. E-mini S&P futures declined 0.36% and September Nasdaq futures dropped 1.36%.
Equity markets traded mixed as a sharp selloff in semiconductor and AI-infrastructure shares pressured the broader indices. Sentiment was further dampened by the collapse of trade negotiations between the U.S. and Canada last Friday, which prompted Washington to impose a 50% tariff on roughly $20 billion of Canadian goods. Ottawa has vowed retaliatory measures effective September 8.
Losses were partially capped by a more than 2% slide in crude oil prices, which pulled inflation expectations and bond yields lower. The 10-year Treasury yield fell 2 basis points to 4.71%.
On the economic front, the July Chicago Fed National Activity Index declined to -0.08 from -0.14, slightly better than the -0.09 forecast. Investors are also monitoring a scheduled press conference from Treasury Secretary Bessent, who is expected to outline plans to further isolate Iran’s economy. Bessent told the Financial Times the objective is to “sever every economic lifeline that sustains the tyrannical regime.” Iran responded by warning that any nation supporting U.S. economic pressure would be considered an act of war, threatening to halt all oil exports through the Strait of Hormuz and the Persian Gulf.
October WTI crude futures extended declines after Axios reported that roughly 40 tankers exited the Strait of Hormuz Friday night, moving approximately 16 million barrels of crude. Additionally, the Joint Maritime Information Center lowered the threat level for shipping in the Gulf of Oman to “moderate,” indicating attacks are possible but not likely. President Trump stated the U.S. naval blockade is pressuring Iran with no set timeline for resolution, while Energy Secretary Chris Wright signaled a “long game” approach, suggesting prolonged constraints on Middle Eastern supply.
Corporate earnings remain a supportive backdrop. The S&P 500 is tracking nearly 32% earnings growth for Q2, significantly above the 23% estimate and roughly four times the post-Covid average since late 2013, according to Bloomberg Intelligence. AI infrastructure spending is driving the bulk of that strength, projected to contribute nearly 60% of the index’s EPS growth. With 468 companies reporting, 86% have beaten estimates.
Fed funds futures imply a 40% probability of a 25-basis-point rate hike at the September 15-16 FOMC meeting.
Overseas, the Euro Stoxx 50 fell 0.17%. China’s Shanghai Composite dropped 0.59% to a 2.5-week low, and Japan’s Nikkei 225 declined 0.74%.
Interest Rates
September 10-year T-note futures rose 5 ticks, pushing the yield down 2.4 basis points to 4.710%. Treasuries benefited from lower oil prices easing inflation fears and safe-haven demand sparked by equity weakness. Gains accelerated on a CNBC report suggesting the Treasury might utilize its $935 billion General Account balance to fund buybacks of higher-yielding, older securities. Upside remains capped by heavy supply, with $211 billion in notes and floating-rate notes slated for auction this week, starting with Tuesday’s $69 billion 2-year sale.
European yields drifted lower. The 10-year German bund yield dipped 0.1 basis point to 3.257%, and the U.K. gilt yield fell 0.1 basis point to 5.059%. ECB Executive Board member Piero Cipollone cautioned that hiking rates to combat a supply-side oil shock could further dampen already weak growth. Markets price a 96% chance of a 25-basis-point ECB hike at the September 10 meeting.
US Stock Movers
Semiconductor and AI infrastructure stocks led decliners. SanDisk (SNDK) plunged over 9% to pace losses in the S&P 500 and Nasdaq 100. Marvell Technology (MRVL), Western Digital (WDC), Micron Technology (MU), and Seagate Technology (STX) all fell more than 6%. Intel (INTC) and Lam Research (LRCX) dropped over 4%, while Advanced Micro Devices (AMD), Microchip Technology (MCHP), Applied Materials (AMAT), Nvidia (NVDA), Arm Holdings (ARM), KLA Corp (KLAC), and NXP Semiconductors (NXPI) declined more than 2%.
U.S. steel producers rallied on the Canadian tariffs. Cleveland-Cliffs (CLF) surged over 8%, Steel Dynamics (STLD) jumped over 5%, and Nucor (NUE) rose over 4%.
Homebuilders and suppliers advanced as lower yields supported housing demand. Builders FirstSource (BLDR) gained over 3%, while D.R. Horton (DHI), Lennar (LEN), PulteGroup (PHM), KB Home (KBH), and Toll Brothers (TOL) rose over 1%.
Regenxbio (RGNX) plummeted over 21% after the FDA placed a clinical hold on its RGX-121 gene therapy for Hunter Syndrome due to spinal MRI findings in trial participants. Applied Optoelectronics (AAOI) slid over 15% following a $600 million shelf filing.
Visa (V) and Mastercard (MA) climbed over 2% after a CNBC report indicated President Trump purchased shares in June. Darden Restaurants (DRI) rose over 2% on a Baird upgrade to Outperform with a $250 price target.
Earnings Reports (8/24/2026)
Napco Security Technologies (NSSC).
