Monday mixed market winners shift to banks, retail as tech sells off

Monday mixed market winners came from outside the tech trade, with banks, retailers and health care stocks gaining as chip and AI-linked shares sold off, according to the CNBC Investing Club. For everyday investors, the move showed how quickly leadership can rotate when oil, interest rates and crowded tech positions all move at once.

CNBC said stocks were mixed to start the week after the U.S. and Iran paused military strikes over the weekend. That easing in geopolitical pressure pushed U.S. oil prices sharply lower, with West Texas Intermediate crude down about 7% to around $83 a barrel.

Lower oil prices can cool inflation worries because fuel costs feed into transportation, goods prices and consumer spending. CNBC said that helped lift bond prices, which move opposite yields, sending the 10-year Treasury yield lower while it stayed elevated near 4.65%.

What stocks were winning in Monday's mixed market?

Financials were among the areas benefiting from the drop in oil and the calmer inflation read. CNBC said the State Street Financial Select Sector ETF, known by its ticker XLF, reached a new intraday all-time high. Capital One rebounded after falling following last week’s earnings, and Wells Fargo also traded higher, according to CNBC.

Consumer names also participated in the gains. CNBC pointed to TJX Companies, Starbucks and Costco as retail and consumer stocks that were higher during the session. Industrials were positive too, except for those more closely tied to data-center demand, CNBC said.

Health care offered another pocket of strength. Johnson & Johnson hit a new all-time high, according to CNBC, after rising about $20, or roughly 8%, from its post-earnings drop two weeks earlier. CNBC framed that rebound as a reminder that the first move after an earnings report does not always hold.

Why were chip and AI stocks under pressure?

The weakness was concentrated in semiconductor and artificial-intelligence beneficiaries. CNBC said the Philadelphia Stock Exchange Semiconductor Index fell about 4% for a second straight session and was down about 23% from its highest close on June 22, two days before Micron’s most recent earnings report.

One concern was spending. Alphabet said on its earnings call last week that capital expenditures, or capex, would keep rising into 2027, according to CNBC. Capex means money a company spends on long-term assets such as data centers, chips and equipment. Meta Platforms, Microsoft and Amazon are due to report later in the week, and CNBC said their results could point in a similar direction.

Nvidia fell 5% after reports that it was in talks with OpenAI to provide a $250 billion backstop for one of OpenAI’s data-center projects, CNBC said. The reports revived worries about circular deals, a term investors use when companies in the same growth chain fund or support each other in ways that can blur the line between real end demand and financing support.

CNBC also cited pressure from concerns that China is narrowing the gap in artificial intelligence through cheaper models and semiconductor manufacturing tools. The quick reaction to negative headlines showed how sensitive the AI trade has become after a strong run.

The rate backdrop remains central. The Federal Reserve begins its two-day July meeting Tuesday, with a decision due Wednesday afternoon. According to the CME FedWatch tool cited by CNBC, markets were pricing just over a 60% chance that rates stay unchanged and nearly a 40% chance of an increase.

Earnings will add more company-specific tests. CNBC said Nucor, Celestica, Universal Health Services and Amkor Technology were scheduled after the bell, while Corning and Boeing were due before Tuesday’s open. Coca-Cola, UPS, PayPal, Centene, Pentair and Royal Caribbean were also set to report Tuesday morning, alongside the Conference Board’s latest consumer confidence data.

This story draws on original reporting from CNBC.