U.S. stock indices settled mixed on Monday as market participants navigated between hawkish central bank commentary and optimism surrounding the impending third-quarter earnings season. The Dow Jones Industrial Average gained 0.38% to reach a 2.5-week high, while the broader S&P 500 index slipped 0.06% and the tech-heavy Nasdaq 100 dropped 0.71%. Market volume was lighter than usual due to the closure of the cash Treasury market for the Columbus Day holiday. Cleveland Fed President Beth Hammack set a cautious tone, delivering hawkish remarks that highlighted broad-based inflationary pressures and the continued need for restrictive monetary policy to achieve the Fed’s 2% target.

Energy and Airlines: Soaring Crude Weighs on Aviation

The energy complex was in sharp focus as November WTI crude oil prices surged by more than 2%. The rally was catalyzed by an escalation in Middle East tensions after Iran-backed Houthi rebels in Yemen launched drone and missile attacks on Saudi Arabia over the weekend. Increased hostilities near the Strait of Hormuz raised fresh concerns over the stability of regional energy exports.

The spike in crude prices placed immediate pressure on the airline industry, which is highly sensitive to rising jet fuel costs. JetBlue Airways (JBLU) tumbled more than 5%, and Alaska Air Group (ALK) fell over 3%. Conversely, energy producers rode the momentum higher. APA Corp and ConocoPhillips both gained more than 2%, while major players like Chevron (CVX) and ExxonMobil (XOM) advanced over 1%.

Semiconductors and AI Under Pressure: Broad Sector Selloff

Chipmakers and artificial intelligence infrastructure stocks were the primary drag on the Nasdaq. Lumentum Holdings (LITE) led the decline, plunging more than 9%, closely followed by Sandisk (SNDK), which lost over 5%. Heavyweights across the semiconductor space also suffered significant pullbacks: ARM Holdings and Micron Technology (MU) both dropped more than 4%, while Intel (INTC), Marvell Technology (MRVL), and Advanced Micro Devices (AMD) firmly closed in the red. The broad tech weakness appeared driven by near-term profit-taking and the macroeconomic headwind of rising energy costs.

Earnings Momentum: High Hopes for Major Bank Reports

Despite the sector-specific pressures, the broader market remains anchored by strong fundamental expectations. Goldman Sachs upgraded its three-month view on global equities to “Overweight,” asserting that steady earnings growth provides a solid foundation for stocks following recent valuation resets. According to Bloomberg Intelligence, analysts have revised their Q3 profit growth estimates for the S&P 500 upward to 25% year-over-year, up from the 22% expected in July. The earnings season shifts into high gear this week, headlined by reports from financial titans including Goldman Sachs, JPMorgan Chase (JPM), and Citigroup (C).