Dow falls 290 points as Nasdaq steadies on chip rebound, earnings focus

US stocks ended mixed on Monday as investors balanced hopes of easing in the US-Iran conflict against uncertainty ahead of a crucial week of corporate earnings.

While semiconductor stocks rebounded from last week's selloff, broader market sentiment remained cautious.

The Dow Jones Industrial Average fell 297 points, or 0.57%, to close at 51,848.96. The S&P 500 slipped 0.18% to 7,444.19, while the Nasdaq Composite edged down 0.04% to 25,510.27 after trading higher earlier in the session.

Markets remained focused on geopolitical developments after the United States carried out its ninth consecutive day of strikes on Iran.

Investor sentiment improved after reports indicated that intermediaries had continued exchanging messages with Tehran, raising hopes for renewed diplomatic efforts.

Yemen's Iran-aligned Houthis also announced a naval blockade on Saudi Arabia, increasing concerns about global energy supplies and shipping routes.

Oil prices remained elevated throughout the session.

US crude traded around $83 per barrel, while Brent crude hovered near $89 as markets monitored the potential impact of Middle East tensions on the Strait of Hormuz and broader energy markets.

Semiconductor stocks recover ahead of major tech earnings

Chipmakers recovered after last week's sharp pullback, helping limit losses in technology shares.

Micron Technology gained more than 1%, while Astera Labs rose over 2%. Teradyne advanced about 3%, and Advanced Micro Devices added roughly 2%. The VanEck Semiconductor ETF also posted a modest gain.

The rebound followed a difficult week for semiconductor stocks after the Philadelphia Semiconductor Index entered bear market territory, closing more than 20% below its late-June record high.

Investors are now looking to upcoming earnings from Intel and Texas Instruments for signs that demand across the semiconductor sector remains resilient.

The broader second-quarter earnings season also gathers pace this week, with Alphabet, Tesla and Intel among the major technology companies scheduled to report results.

According to LSEG data, analysts now expect S&P 500 companies to post year-over-year earnings growth of 26% for the quarter, up from an earlier estimate of 23.7%.

Alphabet gains while investors await broader earnings signals

Alphabet shares rose after reports that Google is developing a new Gemini-integrated server chip designed to improve AI efficiency and reduce computing constraints.

The project aims to optimize performance by embedding parts of Gemini directly into the chip architecture.

Elsewhere, Domino's Pizza shares advanced after the company reported quarterly revenue that slightly exceeded Wall Street expectations.

Oracle stock fell nearly 4% after CLSA initiated coverage with a Hold rating and warned that the company would need $500 billion to support its expansion till 2030.

Investors largely remained on the sidelines ahead of the week's earnings releases from technology, energy and consumer companies.

Corporate guidance, particularly from AI-related businesses, is expected to play a significant role in determining whether the recent weakness in semiconductor stocks marks a temporary correction or a broader shift in market sentiment.