A lackluster start to bank earnings season left U.S. markets drifting lower as investors remain tethered to persistent inflation fears and the looming trajectory of Federal Reserve interest rates. The Dow Jones Industrial Average shed 180.45 points, closing at 51,670.10, while broader indices mirrored the tepid sentiment.
The S&P 500 dipped slightly by 0.02% to 7,805.45, and the Nasdaq Composite retreated 0.15% to 27,204.38. Treasury yields presented a mixed picture: the 10-year note yield slid to 5.216%, while the two-year note edged up to 4.791%. Market participants are now bracing for Wednesday's Consumer Price Index report, with economists anticipating an uptick in annual inflation to 3.6% from August’s 3.4%.
Commodities faced downward pressure as Brent oil fell 0.9% to $105.69 amid ongoing legislative friction regarding potential Russian diesel imports. Simultaneously, the ICE dollar index declined 0.4% to 102.19, and gold prices dropped 0.3% to $4,152.90 per troy ounce.
The semiconductor sector faced a particularly sharp correction. Both VanEck and iShares Semiconductor ETFs marked their sixth consecutive day of losses—the longest streak since May 2025. Shares of Micron Technology and Applied Materials struggled as investors recalibrated their outlook following a technological breakthrough by Chinese memory firm CMXT. Elon Musk fueled these anxieties, suggesting that Chinese manufacturers could rapidly scale memory production, posing a formidable challenge to established industry leaders.
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