Wall Street closed mixed Monday as a broad sell-off in chipmakers offset a modest gain in the Dow Jones Industrial Average, with traders trimming semiconductor exposure two sessions ahead of Nvidia's pivotal earnings report Wednesday. The S&P 500 slipped 0.28% to 7,652.86 and the Nasdaq Composite dropped 0.76% to 25,980.19, while the Dow added 0.26% to close at 53,417.16 as investors rotated into defensive, blue-chip names.
Chipmakers lead the retreat
Intel fell 5% to $85.98, Advanced Micro Devices slid 4% to $454.36, and Taiwan Semiconductor Manufacturing lost 3% to $406.40. The iShares Semiconductor ETF, a proxy for the group, dropped 4% to $501.17, and Nvidia itself fell 2.9% as investors trimmed risk ahead of Wednesday's report, according to a Motley Fool market wrap.
Traders pointed to several overlapping pressures. Reports that some Nvidia customers may face price increases of roughly 15% on servers built around the company's AI chips rattled the group, according to Yahoo Finance. Memory makers Micron Technology and SanDisk also fell after a Chinese rival filed for an IPO in Shanghai, stoking concern about future supply competition. Much of the move, though, looked like simple position-trimming: Nvidia has averaged a roughly 2% decline on its last four earnings days despite beating profit estimates each time, a pattern that has left traders cautious heading into Wednesday's release, when Wall Street expects year-over-year earnings growth of about 99% to $2.09 a share on revenue near $92 billion. Stanley Druckenmiller's Duquesne Family Office had exited its Intel, Micron and Broadcom positions by June 30 while opening a new AMD stake, a reminder that institutional conviction within the chip trade has been shifting all year.
Sanctions and tariffs add to the unease
The chip rout unfolded against a backdrop of fresh geopolitical strain. Treasury Secretary Scott Bessent unveiled Operation Economic Outcast, an expanded sanctions campaign targeting Iran's oil, shipping, gold and aviation trade, which pressured crude prices even as it reinforced demand for gold as a haven. Separately, the collapse of U.S.-Canada trade talks last week — which triggered 50% U.S. tariffs on $20 billion of Canadian goods and a promised dollar-for-dollar Canadian retaliation starting Sept. 8 — kept trade policy in focus, according to The Washington Post.
The Treasury sanctioned nearly 60 corporations, individuals and vessels across multiple jurisdictions as part of the new campaign, including several Chinese nationals accused of facilitating Iranian oil sales, according to NBC News. On the tariff front, the 50% U.S. duties cover Canadian steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics — sectors Ottawa says it will target dollar-for-dollar when its own retaliatory tariffs take effect next month.
Those crosscurrents helped explain the day's split-screen action: consumer-defensive stocks were among Monday's best performers as investors rotated toward stability, while technology and energy names led the retreat. The more cyclical and defensive names that carry heavier weight in the Dow held up better than the tech-heavy Nasdaq, and the 10-year Treasury yield eased slightly to 4.70% as investors sought relative safety. Gold, meanwhile, climbed to a roughly 15-week high above $4,650 an ounce as the same uncertainty pushed haven demand higher — even as the rally owed as much to expectations for expanded Treasury debt buybacks as to the Iran news itself.
Nvidia's earnings, due after the closing bell Wednesday, are the week's dominant catalyst for the broader market given the chipmaker's outsize weight in major indexes and its role as a bellwether for AI-related capital spending. Wall Street will be parsing not just the headline numbers but any commentary on the reported AI-server price increases and on demand trends that could validate or undercut the sharp run-up in chip valuations over the past year. Traders are also watching for follow-through on Iran sanctions enforcement and the run-up to Canada's Sept. 8 tariff-retaliation deadline, both of which carry implications for energy prices and cross-border manufacturing costs in the weeks ahead.
