US stocks closed mixed on Monday as investors assessed rising oil prices and geopolitical tensions ahead of a busy week of corporate earnings and inflation data that could influence the Federal Reserve’s interest rate outlook.
The S&P 500 slipped 0.05% to 7,807.79, while the Dow Jones Industrial Average gained 0.38%, or 198.22 points, to close at 51,853.17.
The Nasdaq Composite fell 0.44% to 27,246.
The session came after all three major indexes recorded weekly gains, supported by technology stocks and optimism surrounding artificial intelligence investment.
Investors are now turning their attention to third-quarter earnings, with major US banks scheduled to report results, alongside September inflation figures and retail sales data.
Dow gains as technology stocks weigh on Nasdaq
The Dow outperformed the broader market, supported by a 2% increase in Salesforce shares after Bank of America upgraded the stock to Buy from Underperform.
Microsoft shares gained 0.9% after the company announced plans for a major deployment of its own artificial intelligence chips. Its market capitalisation briefly rose above $4 trillion for the first time in a year.
Meta also helped support the communication services sector, while energy stocks outperformed as crude prices climbed.
Technology and consumer discretionary stocks were among the weakest-performing sectors.
Micron Technology shares fell around 3% as investors assessed growing competition from China’s ChangXin Memory Technologies (CXMT), which reported progress on a new memory-chip structure.
The Philadelphia Semiconductor Index declined to a three-week low, reflecting broader weakness across chip stocks.
Chipotle Mexican Grill shares also fell after Starbucks said it was not acquiring the burrito chain.
The S&P 500 finished nearly flat, reflecting the balance between gains in selected large-cap stocks and pressure on technology shares.
Oil prices climb amid Middle East tensions
Oil prices rose as attacks in the Middle East heightened concerns about potential disruptions to global energy supplies.
West Texas Intermediate crude futures gained 2.06% to settle at $93.74 a barrel, while Brent crude futures rose 1.84% to $106.65.
The gains followed deadly attacks on Riyadh’s international airport over the weekend, which increased concerns about regional instability.
The developments overshadowed the prospect of additional Russian diesel supplies and a proposed Russia-Ukraine ceasefire covering energy infrastructure.
The increase in energy prices added to concerns about inflation, particularly as US Treasury yields have recently reached their highest levels in decades.
The Treasury market was closed on Monday for Columbus Day.
Cleveland Federal Reserve President Beth Hammack also indicated that the central bank should move relatively quickly towards a more restrictive monetary policy to address increasingly broad-based inflation pressures.
Traders were pricing in less than a 22% probability of a Federal Reserve rate hike in October, according to CME’s FedWatch tool, compared with 17.7% on Friday.
Bank earnings and inflation data in focus
Investors are preparing for a busy week of corporate results, with major financial institutions including JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America, Morgan Stanley and Wells Fargo scheduled to report earnings.
Analysts expect strong third-quarter results, supported partly by continued investment in artificial intelligence infrastructure.
FactSet estimates cited by CNBC indicated that S&P 500 earnings growth could reach 29.6%, marking a fourth consecutive quarter of growth above 25%.
September consumer price index data is due on Wednesday, followed by the producer price index and retail sales figures on Thursday.
The reports could influence expectations for the Federal Reserve’s next policy decision, particularly as rising energy prices complicate the inflation outlook.
Investors will also assess whether corporate earnings can sustain the recent stock market rally amid geopolitical uncertainty and higher borrowing costs.