Stocks struggled to hold their ground on Monday, following the S&P 500′s third straight weekly gain, as demand concerns for the semiconductor industry weighed on tech names.
The S&P 500 and Nasdaq Composite dipped 0.2% and 0.3%, respectively. The Dow Jones Industrial Average clung to a gain of 25 points, or 0.1%. Stocks initially rose in morning trading but lost ground as the day progressed.
Nvidia announced weaker-than-expected revenue for the second quarter, putting pressure on semiconductor stocks. Shares of the chip giant fell more than 8%, and rival stocks like AMD and Broadcom were also under pressure.
Some clean energy related shares gained after the Senate passed the Inflation Reduction Act. The measure includes billions of dollars aimed at addressing climate change. The House is expected to pass the measure later this week.
Monday’s moves follow a weekly rise for the S&P 500 and the Nasdaq Composite as a surprisingly strong monthly jobs report eased some recession fears. The resilient labor market also signaled that the economy could withstand more rate hikes from the Federal Reserve.
“The question is if the rally is running out of breadth,” said Angelo Kourkafas, investment strategist at Edward Jones. “There are certainly things that have improved after the past month that would justify, in our view, a move higher, which we have certainly seen. … However, a lot has to go right to be able to say that the coast is clear.”
A new reading for the consumer price index, slated for release Wednesday, will give investors more clarification about the central bank’s next move at its policy meeting in September.