Wall Street edged lower on Monday, with the technology-heavy Nasdaq Composite leading the decline as investors pared positions in chipmakers and other high-growth names. The Dow Jones Industrial Average slipped 4.47 points, or 0.01%, to close at 49,521.70, while the S&P 500 fell 21.33 points, or 0.29%, to 7,387.17. The Nasdaq Composite dropped 171.47 points, or 0.65%, to 26,053.68.
The pullback came as the 10-year Treasury yield held near its recent peak, raising borrowing costs and reducing the present value of future corporate profits. Meanwhile, oil prices remained volatile, with Brent crude trading between $112 and $107 before settling higher, as traders weighed geopolitical risks tied to the Iran conflict and potential supply disruptions. The combination of higher energy costs and firm yields has kept inflation worries at the forefront of market sentiment.
Technology stocks were the primary drag on the session. The S&P 500 technology sector fell 1.4% as the market looked ahead to Nvidia's quarterly earnings report on Wednesday. Analysts pointed to profit-taking after a rapid rally and concerns about geopolitical tensions involving Taiwan following President Donald Trump's visit to China. “Given Taiwan’s significance to the chip market,” investors also wanted to take some profits, said Oliver Pursche, senior vice president at Wealthspire Advisors. “There’s concern about the rally we’ve had in a short period of time,” added Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.
Nvidia, now the world’s most valuable company, is scheduled to report results on Wednesday, with Walmart also due later in the week. These reports are expected to test two key investor themes: the sustainability of artificial intelligence spending and the resilience of the U.S. consumer amid higher energy prices and persistent inflation.
In deal news, NextEra Energy and Dominion Energy announced an all-stock merger valued at $66.8 billion, aiming to create a major electric utility to meet rising power demand from AI data centers. “The country needs energy infrastructure built faster, more efficiently, and more affordably,” said NextEra CEO John Ketchum. Dominion shares surged 10% on the news, while NextEra fell 5%. The merger provided some support to the broader market outside of technology.
Healthcare stocks also saw notable moves. Regeneron Pharmaceuticals slipped after its melanoma drug failed to meet the primary endpoint in a late-stage study against Merck’s Keytruda. The company still has a separate head-to-head trial against Bristol Myers Squibb’s Opdualag underway. BMO Capital Markets analyst Evan Seigerman noted that “back-to-back key pipeline misses” increase the stakes for Regeneron’s R&D pipeline over the next 12 to 18 months.
UnitedHealth Group weighed on the Dow after Berkshire Hathaway disclosed it had sold its stake in the insurer. “Any Berkshire trade can hit a stock, whether it was Warren Buffett behind the change or not,” said Bill Stone, chief investment officer at Glenview Trust.
Looking ahead, market participants are watching for potential catalysts that could reignite buying interest. A strong earnings report from Nvidia or a decline in oil prices could draw buyers back to large-cap technology stocks. However, if oil continues to climb, yields remain elevated, and retailer results point to weakening consumer spending, the AI-driven rally could face a more sustained challenge than Monday’s modest declines suggest.
