The S&P 500 (-0.3%), Nasdaq Composite (-0.6%), and Dow Jones (-0.3%) ended today’s session lower amid rising oil prices and weakness in most large-cap technology companies. A relatively light flow of corporate news and some caution ahead of tomorrow’s July Consumer Price Index release (consensus +0.1%) kept the major indexes near flat levels for the first two hours of trading. Oil initially pulled back from its overnight highs after Bloomberg reported that Pakistan’s defense minister Khawaja Asif said the U.S. and Iran were close to an agreement. However, the tone shifted later in the morning as reports emerged that Iran’s demands must be met before it agrees to reopen the Strait of Hormuz.
While there were isolated pockets of weakness across the market, declines were more pronounced among large technology companies. The communication services sector (-2.1%) posted the worst performance among S&P 500 sectors, with Alphabet (-3.6%) hit particularly hard, while weakness in Amazon (-2,1%) pressured the consumer discretionary sector (-0.8%).
In the information technology sector (-0.3%), pressure on shares of companies such as Oracle (-3.7%) and AppLovin (-6,0%) intensified after yesterday’s rally. Semiconductor stocks were a relative bright spot, although the PHLX Semiconductor Index (+0.9%) finished well below its intraday highs.
Following the semiconductor group, the industrials sector (+0.6%) also advanced, with Axon (+6.7%) leading the S&P 500, partially offsetting the sharp post-earnings drop last week. The defensive utilities sector (+1.1%) matched the energy sector for the day’s best performance amid weakness in technology stocks.