Wall Street's major indexes closed lower on Monday (Tuesday AEST) as investors weighed signs of possible de-escalation in the Middle East while awaiting a busy week of corporate earnings led by major technology companies.
The Dow Jones Industrial Average fell 307.2 points, or 0.6%, to 51,839.3. The S&P 500 declined 14.4 points, or 0.2%, to 7,443.3, while the Nasdaq Composite eased 12.2 points, or 0.1%, to 25,508.1.
Second-quarter earnings season gathers momentum this week, with reports due from technology heavyweights Alphabet and Tesla, providing investors with a broader picture of corporate America's health following a first wave of results dominated by financial companies.
According to FactSet's Earnings Insight, for Q2 2026, the blended (year-over-year) earnings growth rate for the S&P 500 is 24.7%. If 24.7% is the actual growth rate for the quarter, it will mark the second-straight quarter of earnings growth above 20% for the index.
Investors will also closely watch results from semiconductor manufacturers Intel and Texas Instruments for signs of improving demand after the Philadelphia Semiconductor Index confirmed a bear market on Friday, closing more than 20% below its late-June record high.
Geopolitical developments remained firmly in focus after Yemen's Iran-aligned Houthis announced a naval blockade on Saudi Arabia, opening a new front in the U.S.-Israeli conflict with Iran and raising concerns over global energy supplies and trade beyond the Gulf.
However, sentiment was supported after a senior Iranian official told Reuters that mediators had presented Tehran with a proposal for a 10-day ceasefire with the United States aimed at reviving an interim agreement reached last month.
Among individual stocks, Apple fell 2.1%, weighing on the broader market, while Microsoft gained 2.2% to provide the biggest boost to the major indexes.
Alphabet rose 1.5% after reports that its Google division is developing a Gemini-integrated server chip designed to improve artificial intelligence efficiency and reduce computing-capacity constraints.
Domino's Pizza advanced 2.1% after the restaurant chain reported quarterly revenue that narrowly exceeded Wall Street expectations.
On the bond markets, U.S. Treasury yields moved higher, with the 10-year yield rising 1% to 4.594%, while the two-year yield increased 0.7% to 4.211%.
