Dow rises; S&P 500, Nasdaq fall on chip weakness; oil drops 6% as Mideast tensions ease

U.S. stock markets ended mixed on Monday, with the Dow Jones Industrial Average managing to hold onto modest gains while the S&P 500 and Nasdaq Composite closed in negative territory. The divergence was driven by weakness in semiconductor stocks, which weighed on the broader technology sector and pulled the S&P 500 and Nasdaq lower. The Dow, by contrast, was supported by gains in other sectors, allowing it to eke out a positive finish.

Investors are now turning their attention to the Federal Reserve's upcoming policy decision, as well as a wave of earnings reports from major technology companies scheduled for the week. The Fed is widely expected to hold interest rates steady, but markets will be watching for any signals about the timing of future rate cuts. Big tech earnings from companies like Apple, Microsoft, and Amazon are also in focus, as their results could set the tone for the broader market.

In other markets, Treasury yields fell as investors sought safe-haven assets amid ongoing geopolitical uncertainty. Oil prices plunged by about 6%, driven by a pause in hostilities between the U.S. and Iran, which eased fears of supply disruptions. The drop in crude oil prices provided some relief to consumers and industries reliant on energy costs, but also reflected shifting risk sentiment.

The mixed performance on Wall Street comes after a period of volatility, with the S&P 500 and Nasdaq having posted gains earlier in the year before encountering headwinds from inflation concerns and geopolitical tensions. The Dow's resilience on Monday suggests some rotation out of technology stocks into more defensive or cyclical sectors.

Looking ahead, the Fed's decision on Wednesday will be a key catalyst for markets. If the central bank signals a more dovish stance, it could boost equities, while a hawkish tone might reignite selling pressure. The big tech earnings later in the week will also be critical, as they account for a significant portion of the S&P 500's market capitalization. Any disappointments could amplify the recent weakness in the tech sector.