Mixed finish on Wall Street as Dow rises, Nasdaq falls

U.S. equities ended the first trading day of the week on a mixed note. The Dow Jones Industrial Average gained 196 points, while the broader benchmarks lost ground, with the Nasdaq 100 dropping 0.71%.

The small changes in the major averages hid more significant drops in individual stocks. Shares of Ciena and Lumentum declined close to 10%, and several chip, networking and data-center names fell by at least 4%. Although the S&P 500 barely budged, investors in those equities experienced much greater losses.

Monday's trading coincided with the U.S. cash Treasury market being shut for Columbus Day. That meant no fresh cash-bond yield data was available for equities. Friday's yield levels should not be seen as reflecting any interest-rate shift on this day.

U.S. stock market closing numbers

• The Dow Industrial Average rose 196.00 points, or 0.38%, to 51,856.18.

• The S&P 500 fell 4.30 points, or 0.06%, to 7,807.24.

• The Nasdaq Composite declined 120.27 points, or 0.44%, to 27,245.90.

• The Russell 2000 dropped 12.50 points, or 0.45%, to 2,794.48.

• The Nasdaq 100 lost 218.45 points, or 0.71%, to 30,664.70.

The Dow stood out as the sole gainer. Small-cap stocks also declined, indicating that the weakness was not limited to the tech-focused Nasdaq indexes.

AI infrastructure and chip stocks suffer the largest losses

• Ciena (CIEN) fell 9.95%.

• Lumentum (LITE) dropped 9.78%.

• Credo Technology (CRDO) slid 7.25%.

• Corning (GLW) lost 6.00%.

• Astera Labs (ALAB) gave up 5.29%.

Additional chip and computing stocks also posted losses:

• SanDisk (SNDK) declined 5.97%.

• Monolithic Power Systems (MPWR) fell 4.84%.

• Super Micro Computer (SMCI) dropped 4.48%.

• Arm (ARM) slid 4.15%.

• SK hynix ADR (SKHY) lost 4.02%.

Other notable decliners included:

• Athena Global Technologies (ATHN) fell 9.09%.

• Bloom Energy (BE) dropped 6.50%.

• Moderna (MRNA) declined 5.04%.

• Nebius Group (NBIS) slid 4.98%.

• CrowdStrike (CRWD) lost 4.37%.

The heavy losses concentrated in AI infrastructure and related tech shares account for the Nasdaq's weaker performance. This also illustrates that a near-flat S&P 500 does not always signal a calm session.

Earnings and economic reports take the spotlight

Monday's holiday session marked a calm beginning to what could be a hectic week. The third-quarter earnings season kicks off with large banks and financial firms such as JPMorgan Chase, Wells Fargo, Bank of America and Morgan Stanley reporting. Market participants will seek insights beyond the headline results on topics like loan demand, credit quality and consumer health.

On the technology front, ASML and TSMC are set to deliver key updates regarding semiconductor demand and capital spending. Following Monday's steep drops in AI-linked stocks, their guidance may influence whether buyers return or sellers continue to apply pressure.

The economic agenda includes the CPI report on Wednesday and PPI on Thursday, plus retail sales data this week. Inflation figures will challenge expectations for Federal Reserve policy, while retail sales will indicate if consumer spending remains resilient amid elevated prices. Robust earnings could provide a catalyst for buyers. However, higher-than-expected inflation might drive yields up and complicate the situation, especially for growth stocks.

Trading lesson: Look beyond the index

A stock index is a weighted collection of shares. Gains in certain constituents can compensate for steep declines in others, making the overall change appear modest.

For market participants, the key takeaway is to examine both the overall market and the specific stock in hand. A rising Dow does not create a bullish outlook for a chip stock that has dropped 5% or more. For that stock to show stronger ownership, buyers must recapture its resistance levels and hold above them.