US stocks were mixed on Monday. The S&P 500 fell 0.3%, while the Nasdaq Composite dropped 0.6%. The Dow Jones Industrial Average gained 142 points, or 0.3%. Technology stocks were the main drag on the market. Chip stocks came under heavy selling pressure, with investors pushing several major semiconductor names lower.
Chip stocks drag S&P 500 and Nasdaq lower
Micron Technology was among the biggest losers. Micron shares fell more than 6%. Advanced Micro Devices dropped about 3%, while Broadcom fell around 2%, CNBC reported. The semiconductor sector also took a hit.
The iShares Semiconductor ETF (SOXX) fell almost 3% on Monday. It had already dropped 5.5% last week, showing that chip stocks have been under pressure for several sessions. Several other technology stocks also declined sharply. Coherent and Lumentum fell more than 7% each, while Sandisk dropped 9%. Corning fell 4% and Seagate Technology declined 6%.
Nvidia stock heads for longest losing streak since 2022
Nvidia was also under pressure. Nvidia shares fell more than 2% on Monday. The stock is now on track for its seventh straight day of losses. If it continues to fall, this would be Nvidia’s longest losing streak since September 2022, according to CNBC.
Nvidia has lost about 7% during the current losing streak. The fall comes just days before the major AI chipmaker is set to report its second-quarter results after the market closes on Wednesday. The earnings report is expected to be closely watched by investors.
Treasury yields fall as bond buyback plan lifts markets
Bond yields moved lower on Monday. The 10-year Treasury yield fell 3 basis points to 4.708%, while the 30-year Treasury yield dropped more than 3 basis points to 5.237%. The fall in Treasury yields came after a report about possible government bond buybacks. CNBC reported that the US Treasury could use its General Account, which holds nearly $1 trillion, to help fund its recently announced bond-buying plans.
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US Treasury may use $1 trillion General Account
The Treasury’s plan could give it more power to influence long-term borrowing costs. Buying existing government bonds can help support their prices and push their yields lower. The Treasury had already announced plans to increase its bond buybacks. Last week, it said it would at least double purchases of certain longer-term government debt from $2 billion to at least $4 billion.
Treasury Secretary Scott Bessent said the programme could become even larger. In an interview with CNBC last week, Bessent said the buyback operation could be bigger than the newly announced $4 billion minimum. The Treasury has not clearly explained how it would fund the buybacks. Many investors expected the government to sell more short-term Treasury bills to finance the purchases.
Bessent described the strategy as a “Treasury Twist.” The idea involves buying longer-term Treasury securities while using short-term debt issuance as part of the financing strategy. The bond-market move offered some relief to longer-term Treasury yields. However, that relief did not last for long as investors remained worried about high borrowing costs and inflation.
High global bond yields keep pressure on stocks
Global bond yields have also been putting pressure on stocks. Rates in Japan, France and Germany have climbed to multi-year highs, adding to concerns about borrowing costs around the world.
Oil and inflation are another concern for investors. Fears that the US-Iran war could last longer have raised worries that oil prices could remain high, which could keep inflation elevated.
Higher inflation could make it harder for central banks to cut interest rates. That is important for stocks because investors generally prefer lower interest rates, which can make borrowing cheaper and support company valuations.
Also read: Why did stock futures slip? Treasury yields, Iran war fears weigh on Wall Street
Investors are also watching the Federal Reserve closely. Fed Chairman Kevin Warsh is expected to speak Friday at the Fed’s annual symposium in Jackson Hole, Wyoming, according to CNBC.
Peter Boockvar said the Treasury’s strategy creates a new issue for the Fed. Boockvar, chief investment officer at One Point BFG Wealth Partners, said the Treasury’s attempt to control long-term rates could make US interest costs more closely connected to the Federal Reserve’s short-term interest rate.
Trump announces 50% tariffs on Canadian cars and steel
Trade tensions added another layer of pressure to the market. President Donald Trump announced that tariffs on Canadian cars, trucks, automotive parts and steel will rise to 50% from January 1, 2027.
Trump made the announcement after US-Canada trade talks broke down. The two countries have blamed each other for the collapse of negotiations. Trump said companies could avoid the tariffs by producing in the US.
In a Truth Social post, he said that vehicles and other affected products built in the US would face zero tariffs, according to CNBC. Trump also argued that Canada needs the US more than the US needs Canada. He said Canada does about 95% of its business with the US, while making the opposite claim about US trade dependence.
The new Canadian tariffs could affect automakers and manufacturers. Higher duties on cars, parts and steel could raise costs for companies that depend on Canadian imports and could add to broader trade and inflation concerns.
Steel stocks rise after US-Canada trade talks collapse
Steel stocks moved higher after the US-Canada trade talks collapsed. Nucor rose more than 4%, while Steel Dynamics gained about 3.5%. Canada is also planning retaliatory tariffs on US steel. Those tariffs are expected to begin on September 8.
Bitcoin stocks fall after strong crypto rally
Bitcoin-related stocks pulled back after a strong rally. Bitcoin traded around $77,000 over the weekend after gaining 22% during a three-day rally last week. Robinhood and Coinbase gave back some of their recent gains.
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Robinhood, which had jumped more than 18% during the three-day crypto rally, fell about 1% before the bell. Coinbase, which had gained more than 27% during the rally, also fell about 1%, CNBC reported. Other chip stocks were also weaker before the market opened. Marvell Technology fell almost 3.5%, while AMD and Intel declined about 2% each.
Gold hits highest level since May as investors seek safety
Gold moved higher as investors looked for a safer asset. Gold futures reached 4,728.3, their highest level since May 13, when gold had traded as high as 4,734.8. Gold-mining stocks also gained. The Gold Miners ETF (GDX) rose 0.8% in premarket trading, putting it on track for its fourth straight day of gains.
The market had already opened lower earlier in the session. Shortly after Monday’s opening bell, the S&P 500 was down 0.2%, the Nasdaq was down 0.5%, while the Dow was up 32 points, or 0.1%. The main market story was therefore a split between the major indexes. The Dow benefited from strength in some non-tech stocks, while heavy selling in semiconductor and technology shares pulled the S&P 500 and Nasdaq lower.
Overall, investors are balancing several risks at once. Weakness in chip stocks, high global bond yields, uncertainty over US interest rates, higher oil-price risks and renewed US-Canada tariff tensions are all shaping market sentiment.
Nvidia’s earnings will be one of the biggest events this week. With the stock already falling for six straight sessions and down about 7% during the current slide, investors will closely watch Wednesday’s results for signs about demand for AI chips and the wider technology sector.
