U.S. equities slip as oil spikes, higher yields weigh on tech

By Tide Research U.S. stocks finished modestly lower on Monday, with the S&P 500 and Dow easing from Friday's record closes. Sentiment was pressured by fresh uncertainty around negotiations tied to the Strait of Hormuz, a sharp jump in crude prices, and a rise in Treasury yields that hit growth-stock valuations. Oil returned to the center of market pricing. Weekend signals from Iran suggested that even a deal would not necessarily mean an immediate reopening of the Strait of Hormuz to shipping. Trump said on social media he had noted Iran was seeking compensation for losses from military conflict over the past five months and that he is demanding compensation from Iran as well, directing that it be included in future talks. He also said U.S. forces have "100%" control of the strait and that it is "now open," while claiming Iran periodically lays mines that U.S. forces remove. With the agreement outlook unclear, crude surged. WTI September futures settled up 5.05% at $82.13 a barrel, and Brent October futures rose 4.99% to $87.72, both the highest since August. Brent has now advanced for four straight sessions. Adding to supply concerns, the U.S. Strategic Petroleum Reserve fell below 300 million barrels for the first time since 1983. The oil move helped push yields higher. The 10-year Treasury yield ended near 4.71%, up about 6 basis points on the day, while the 2-year yield was around 4.24%, up about 4 basis points. Rising discount rates weighed most heavily on tech. Mega-cap performance diverged. Microsoft and Amazon gained more than 1% as risk-averse capital rotated toward large, cash-flow-stable names. Apple fell 1.5% after multiple downgrades, with six firms issuing sell calls—the most since 2012. NVIDIA slid nearly 3%, Alphabet A fell about 0.5%, Meta slipped roughly 0.3%, and Tesla declined around 0.8%. NVIDIA's drop came despite headlines that it is exploring a consortium with firms including Apollo, Blackstone, GIP under BlackRock, Brookfield, Goldman Sachs and KKR to raise up to $500 billion from third-party capital for AI infrastructure projects. Markets appeared more focused on what the larger financing ambition implies: AI infrastructure capex demand is still rising while funding costs are moving higher. After the report, NVIDIA credit default swap prices saw their biggest single-day increase in two weeks, underscoring spillover concerns from credit into equities. Elsewhere in semiconductors, Intel said it plans a $15 billion common stock offering, sending shares down more than 4%. Optical communications names saw heavy profit-taking after strong prior gains: Coherent plunged more than 14% and Lumentum fell over 8%. Storage stocks were mixed, with SanDisk up more than 2% while SK Hynix and Seagate Technology each lost more than 1%. SK Hynix outlined plans for new wafer fabs in Yongin and Cheongju, South Korea, totaling about 54 trillion won (roughly $38.4 billion), though the stock did not rally as investors debated memory supply-demand and capex efficiency. The Philadelphia Semiconductor Index closed down about 1.2%. Chinese ADRs stood out on the upside. The Nasdaq China Golden Dragon Index climbed nearly 2%, extending its run of outperformance versus the broader U.S. market. Alibaba rose about 3%. With macro uncertainty elevated, global investors appear to be placing more weight on company fundamentals and valuations, while the pricing impact of geopolitics and the rate backdrop has eased. In commodities and crypto, gold advanced for a second day. Spot gold rose 1.1% to $4,389.29 an ounce, the highest in more than two months, with intraday gains topping 1%. Spot silver jumped 3.57% to $65.75 an ounce. Bitcoin dipped below $64,000 intraday and was down more than 2% from the day's high; Ethereum traded around $1,890, down about 1% over 24 hours. The U.S. Dollar Index rebounded from a one-and-a-half-month low. The Japanese yen briefly weakened 1% to an eight-month low, and offshore yuan pulled back from a three-year high. Looking ahead to Tuesday, the U.S. data calendar is light ahead of CPI, leaving markets to focus on the inflation implications of higher oil and the move in yields. Crude remains the key swing factor as Trump-Iran claims complicate Hormuz-related negotiations. Investors will also watch follow-through on NVIDIA's $500 billion financing plan and whether optical communications names such as Coherent can stabilize.