The U.S. equity landscape posted a mixed close on Monday, with the S&P 500 slipping to a two‑and‑a‑half‑week low while the Dow managed a modest gain and the Nasdaq 100 fell to a three‑week trough. The downturn was amplified by softness in semiconductor and AI‑infrastructure shares and compounded by the abrupt collapse of trade negotiations between the United States and Canada, which triggered a 50 % tariff on roughly $20 billion of Canadian imports and prompted a retaliatory measure from Canada set to start on 8 September.

U.S. Stock Indexes

  • The S&P 500 Index (ticker $SPX, SPY) ended the session down 0.28 %.
  • The Dow Jones Industrial Average (ticker $DOWI, DIA) posted a 0.26 % rise.
  • The Nasdaq 100 (ticker $IUXX, QQQ) finished 0.97 % lower.

Both the S&P 500 and Nasdaq 100 reached their lowest levels in the past 2½ and 3 weeks, respectively, as investors reacted to weakening chip‑related valuations.

Futures and Treasury Yields

  • E‑mini S&P 500 futures (ESU26) slipped 0.27 %.
  • September E‑mini Nasdaq futures (NQU26) declined 0.95 %.

The 10‑year Treasury note yield dropped three basis points, settling at 4.70 %, after crude oil prices fell more than 2 %, easing inflation expectations.

Economic Data

The July Chicago Fed National Activity Index edged down to –0.08 from –0.14, a marginally better outcome than the –0.09 forecasted by analysts.

U.S.–Canada Trade Dispute

Late Friday, talks aimed at easing trade frictions between the United States and Canada fell apart. In response, Washington imposed a 50 % tariff on approximately $20 billion worth of Canadian goods. Canada announced a reciprocal measure targeting U.S. products, slated to take effect on 8 September.

Geopolitical and Energy Developments

U.S. Treasury Secretary Scott Bessent announced a new initiative to isolate Iran from the global economy, warning that any nation engaging with Tehran could face U.S. sanctions. The campaign will focus on five critical Iranian channels: digital assets, technology, gold, aviation, and shipping, with a clear timeline for compliance before unilateral Treasury action is taken.

Iran’s Secretary of the Supreme National Security Council countered, stating that any country supporting what he described as America’s “economic war” would be deemed an adversary, and that Iran would halt all oil exports from the Strait of Hormuz and the broader Persian Gulf.

Crude oil prices (Oct WTI, CLV26) dropped more than 2 % after Axios reported that around 40 tankers moved out of the Strait of Hormuz on Friday night, carrying roughly 16 million barrels of crude. The Joint Maritime Information Center subsequently lowered the threat level for vessels in the Gulf of Oman to “moderate,” indicating that attacks remain possible but are not deemed likely.

Former President Donald Trump reiterated that the U.S. naval blockade of Iranian ports is intended to increase pressure on Tehran, while offering no timetable for a resolution. Energy Secretary Chris Wright echoed a long‑term stance toward Iran, suggesting no imminent de‑escalation and hinting at potential constraints on Middle‑Eastern oil supplies.

Earnings Outlook

Bloomberg Intelligence projects the S&P 500 to deliver close to 32 % earnings growth for the second quarter, well above the 23 % consensus estimate and nearly four times the average post‑COVID earnings expansion recorded since Q4 2013. AI‑related spending is expected to drive the bulk of this gain, with AI‑infrastructure firms projected to account for almost 60 % of the index’s earnings‑per‑share growth in Q2. To date, 86 % of the 468 S&P 500 constituents that have reported second‑quarter results have surpassed analysts’ forecasts.

Interest‑Rate Expectations

Market pricing reflects a 43 % probability that the Federal Open Market Committee will raise the policy rate by 25 basis points at its September 15‑16 meeting.

International Market Snapshot

  • Europe: The Euro Stoxx 50 slipped 0.22 %.
  • China: The Shanghai Composite fell to a 2½‑week low, ending down 0.59 %.
  • Japan: The Nikkei‑225 closed 0.74 % lower.

These global indices mirrored the subdued sentiment observed in U.S. markets.

U.S. Treasury Market

The 10‑year Treasury note advanced by six ticks on Monday, closing at a yield of 4.696 % after slipping 3.8 basis points. The decline in the yield was largely driven by a drop in crude‑oil prices, which tempered expectations for inflation. In addition, the recent weakness in equities has pushed investors toward the safety of U.S. bonds, providing further support for the 10‑year. CNBC reported that the Treasury General Account held a balance of $935 billion as of August 20, a figure that could be leveraged to finance larger buybacks of older, higher‑yielding securities.

Supply constraints are expected to limit the upside for T‑note prices, as the Treasury plans to auction $211 billion of 10‑year notes and floating‑rate notes this week, beginning with a $69 billion auction of 2‑year notes on Tuesday.

European Government Bonds

Bond yields across Europe fell on Monday. The 10‑year German bund yielded 3.253 %, a decline of 0.6 basis points, while the UK 10‑year gilt slipped to 5.057 %, down 0.3 basis points. ECB Executive Board member Piero Cipollone cautioned that a supply‑side shock, such as an oil price spike, could necessitate rate hikes to anchor inflation near the target, potentially dampening growth that is already weakened by such a shock. Market pricing suggests a 95 % probability of a 25‑basis‑point rate increase at the ECB’s next policy meeting on September 10.

U.S. Stock Movers

Chipmakers and artificial‑intelligence infrastructure names were the primary drag on the broader market. SanDisk (SNDK), Seagate Technology (STX), Western Digital (WDC), Micron (MU), AMD, Intel (INTC), and Marvell (MRVL) all fell more than 3 % on Monday, with SanDisk and Seagate each sliding over 6 %. Nvidia (NVDA) was the biggest loser in the Dow, dropping over 2 %, while Microchip (MCHP), Broadcom (AVGO), and Texas Instruments (TXN) also slipped beyond 2 %.

Energy‑sector stocks declined following a more than 2 % drop in WTI crude. Diamondback Energy (FANG) and Halliburton (HAL) fell over 2 %, while APA, ConocoPhillips (COP), Occidental (OXY), Chevron (CVX), and Devon Energy (DVN) all slipped over 1 %.

The announcement of new 50 % tariffs on a broad range of Canadian products and Canada’s pledge to retaliate weighed on logistics and freight names. JB Hunt (JBHT) fell over 5 %, FedEx Freight (FDXF) and ArcBest (ARCB) were down more than 4 %, and Knight‑Swift (KNX), Saia (SAIA), Old Dominion (ODFL), and XPO (XPO) all declined between 2 % and 3 %. Marten Transport (MRTN) slipped slightly, dropping over 1 %.

A dramatic 24 % fall in Regenxbio (RGNX) followed an FDA clinical hold on its gene‑therapy candidate RGX‑121 for Hunter Syndrome, after the agency identified small nodules or a cystic mass in spine MRIs of five trial participants. Applied Optoelectronics (AAOI) also saw a sharp 13 % decline after announcing a potential $600 million share offering.

In contrast, Expedia Group (EXPE) posted a 5 % gain, becoming the top performer in the S&P 500 after Evercore ISI raised its target price to $430 from $375. Mastercard (MA) and Visa (V) each rallied over 3 % in the Dow, spurred by reports that President Trump had purchased shares of the companies during a June portfolio reshuffle. Darden Restaurants (DRI) climbed more than 2 % after Baird upgraded the stock to “outperform” with a $250 price target.

Earnings Reports (8/25/2026)

Key companies reporting earnings on August 25 include Dick’s Sporting Goods (DKS), HEICO Corp (HEI), Intuit (INTU), Semtech (SMTC), and Zoom (ZM).

The day’s developments underscore the sensitivity of U.S. markets to both commodity price movements and corporate earnings, while bond yields continue to reflect a cautious stance on future monetary tightening.