The major U.S. stock indices closed mixed to start the week. The Dow industrial average rose 196 points, but the broader indices finished lower, led by a 0.71% decline in the Nasdaq 100.
The modest index moves masked some much larger declines beneath the surface. Ciena and Lumentum fell nearly 10%, while a number of chip, networking and data-center shares lost 4% or more. The S&P 500 was little changed, but holders of those stocks felt considerably more pain.
The session also came with the U.S. cash Treasury market closed for Columbus Day. That left equities without a fresh cash-bond yield signal. Friday’s yields should not be interpreted as a move in rates today.
U.S. stock market closes
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Dow Industrial Average: +196.00 points (+0.38%) to 51,856.18.
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S&P 500: −4.30 points (−0.06%) to 7,807.24.
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Nasdaq Composite: −120.27 points (−0.44%) to 27,245.90.
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Russell 2000: −12.50 points (−0.45%) to 2,794.48.
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Nasdaq 100: −218.45 points (−0.71%) to 30,664.70.
The Dow was the exception. Small caps also moved lower, so the weakness extended beyond the technology-heavy Nasdaq indices.
AI infrastructure and chip shares take the bigger hit
Networking and connectivity names featured prominently among the largest decliners:
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Ciena (CIEN): −9.95%.
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Lumentum (LITE): −9.78%.
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Credo Technology (CRDO): −7.25%.
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Corning (GLW): −6.00%.
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Astera Labs (ALAB): −5.29%.
Other semiconductor and computing-related shares also struggled:
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SanDisk (SNDK): −5.97%.
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Monolithic Power Systems (MPWR): −4.84%.
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Super Micro Computer (SMCI): −4.48%.
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Arm (ARM): −4.15%.
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SK hynix ADR (SKHY): −4.02%.
Elsewhere, notable declines included:
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Athena Global Technologies (ATHN): −9.09%.
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Bloom Energy (BE): −6.50%.
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Moderna (MRNA): −5.04%.
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Nebius Group (NBIS): −4.98%.
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CrowdStrike (CRWD): −4.37%.
The concentration of losses in AI infrastructure and related technology shares helps explain the Nasdaq’s underperformance. It also shows why a nearly unchanged S&P does not necessarily mean a quiet trading day.
Earnings and economic data take center stage
The holiday session is the quiet start to a potentially busy week. Third-quarter earnings season gets rolling with major banks and financials, including JPMorgan Chase, Wells Fargo, Bank of America and Morgan Stanley. Traders will look beyond the earnings headlines for clues on loan demand, credit quality and the health of the consumer.
For technology, ASML and TSMC will provide important updates on semiconductor demand and investment spending. After today’s sharp declines in AI-related shares, their outlooks could help determine whether buyers regain confidence or sellers keep the pressure on.
The economic calendar also brings CPI on Wednesday and PPI on Thursday, along with retail sales this week. Inflation will test the outlook for Fed policy, while retail sales will show whether consumers are still spending despite higher prices. Strong earnings would give buyers something to work with. But hotter inflation could push yields higher and make the job harder—particularly for growth stocks.
Trading takeaway: Look beneath the index
An index is a weighted basket of stocks. Strength in some components can offset sharp losses in others, leaving the headline change looking relatively tame.
For traders, the practical lesson is to check both the broader market and the stock you own. A higher Dow does not establish a bullish bias for a chip stock falling 5% or more. Buyers in that stock still need to reclaim its own resistance levels and stay above them before they can make a stronger case for control.
This article was written by Greg Michalowski at investinglive.com.