Wall Street opened Monday under pressure as investors sold semiconductor and other high-growth technology stocks ahead of Nvidia’s earnings, while a fresh U.S. sanctions offensive against Iran and stubbornly high Treasury yields added another layer of risk.
By 9:45 a.m. ET, the Nasdaq Composite was down 164.5 points, or 0.63%, at 26,015.94. The S&P 500 fell 20.8 points, or 0.27%, to 7,653.60, while the Dow Jones Industrial Average bucked the weakness and rose 112 points, or 0.21%, to 53,389.19.
The split tells the story.
This is not a broad market panic. It is a concentrated selloff in the part of the market that has carried much of Wall Street’s gains: AI, semiconductors and other expensive growth stocks.
Nvidia fell 2.44% early Monday. Marvell Technology and Micron Technology each dropped more than 6%, while Sandisk plunged 10.62%. The S&P 500 technology sector fell 1.11%, making it the weakest major sector in early trading.
At the same time, advancing stocks actually outnumbered decliners on the New York Stock Exchange by roughly 1.15 to 1.
That is important.
The Dow is rising because money is not simply leaving the market. Investors are rotating away from the most expensive technology names and into other sectors while they wait to see whether Nvidia can justify the expectations already built into AI valuations.
Nvidia reports Wednesday.
Analysts are looking for quarterly revenue of roughly $92 billion — nearly double the level from a year earlier. That would normally be an extraordinary number.
The problem for Nvidia is that extraordinary has become expected.
The stock has become the most important single barometer of the AI investment boom, and its earnings now influence everything from semiconductor manufacturers to data-center operators, utilities, networking companies and the broader Nasdaq.
A strong quarter may therefore not be enough. Investors will be looking for evidence that orders remain strong enough to support the hundreds of billions of dollars being committed to AI infrastructure worldwide.
That concern is already spreading beyond Nvidia.
Alibaba’s U.S.-listed shares fell about 1.2% after the Chinese technology giant announced a $10.2 billion share sale specifically to finance additional AI investment. The financing reinforces a question increasingly hanging over the sector: how much capital will companies need to spend before investors see sufficient returns?
The second pressure on Monday’s market is coming from Washington.
Treasury Secretary Scott Bessent is scheduled to detail what he has called an “economic D-Day” against Iran, with the administration threatening sanctions not only against Iranian entities but potentially against companies and countries that continue trading with Tehran.
That raises the stakes considerably.
China remains the largest buyer of Iranian oil, meaning aggressive secondary sanctions could affect energy flows, shipping, international trade and relations between Washington and Beijing.
Oil prices were actually falling roughly 2% Monday morning, as traders took profits after last week’s sharp increase. But that decline could reverse quickly depending on what Washington announces and how Iran responds.
The third problem is the bond market.
The 30-year Treasury yield remained above 5% Monday, despite Treasury’s decision last week to expand purchases of older long-dated bonds.
That matters because high Treasury yields directly compete with stocks for investor money.
When investors can earn more than 5% lending to the U.S. government for decades, companies trading at extremely high valuations must offer an even stronger earnings argument to justify the additional risk.
That pressure is particularly severe for technology stocks, whose valuations depend heavily on profits expected years into the future.
Monday’s opening therefore is not simply about one bad morning for Nvidia.
It is a test of whether the market can continue supporting enormous AI valuations while long-term interest rates remain above 5%, companies borrow and raise billions more to fund AI expansion, and geopolitical risk threatens to push energy prices higher again.
There is also important economic data coming Wednesday.
The government will release the Personal Consumption Expenditures inflation index, the Federal Reserve’s preferred inflation measure, on the same day Nvidia reports earnings.
Markets have now fully priced in at least one quarter-point Federal Reserve rate increase before the end of 2026, although expectations for an immediate September move have eased.
That makes Wednesday unusually important.
If inflation comes in hot while Nvidia disappoints, Wall Street could face pressure simultaneously from higher interest-rate expectations and weaker confidence in the AI trade.
If inflation cools and Nvidia delivers another exceptional quarter, Monday’s chip selloff could instead become another buying opportunity.
For now, the message from the opening bell is clear: investors are not abandoning stocks — they are demanding a much higher burden of proof from the companies that have become the most expensive and important part of the market.
JBizNews Desk | Wall Street
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