U.S. equities began the week on a mixed note as technology stocks weighed heavily on broader market sentiment. The S&P 500 slipped 0.3% while the Nasdaq Composite fell 1.1%, reflecting renewed pressure across several of the market’s largest technology names. The Dow Jones Industrial Average managed a modest gain, supported by strength in industrial stocks, but investors remained focused on inflation risks, Federal Reserve policy expectations, and developments surrounding negotiations between the United States and Iran.

Big Tech Weakness Drags on Market Performance

Technology stocks were the primary source of market weakness, highlighting growing investor sensitivity toward valuation and growth expectations. Alphabet declined 6% amid concerns regarding artificial intelligence talent retention, while Amazon lost 4% and Meta Platforms fell 2%. Microsoft also retreated 2%, contributing to the Nasdaq’s underperformance.

The pullback reflects a broader shift in market psychology following the Federal Reserve’s recent hawkish messaging. With policymakers signaling the possibility of higher interest rates for longer, investors are increasingly scrutinizing growth-oriented companies whose valuations are highly dependent on future earnings expectations. Rising rates typically reduce the present value of long-term cash flows, making technology stocks particularly vulnerable during periods of monetary tightening.

Despite the weakness, technology remains one of the strongest-performing sectors of the year, driven by continued investment in artificial intelligence infrastructure and enterprise software adoption. However, recent volatility suggests investors are becoming more selective about where they allocate capital within the sector.

SpaceX Faces First Major Post-IPO Test

SpaceX was among the session’s biggest laggards, falling 10% and extending its losing streak to three consecutive trading days. The decline comes after an extraordinary post-IPO surge that briefly propelled the company into the ranks of the world’s most valuable publicly traded firms.

The recent weakness may signal a natural reassessment phase following the company’s record-breaking public debut. While enthusiasm surrounding SpaceX’s ambitions in space exploration, satellite communications, artificial intelligence, and future infrastructure projects remains strong, investors are beginning to focus more closely on valuation metrics and execution risks.

Market history shows that newly listed mega-cap growth companies often experience heightened volatility as initial excitement gives way to a more fundamental evaluation of long-term profitability and capital requirements. SpaceX’s performance over the coming quarters will likely depend on its ability to translate ambitious growth plans into measurable financial results.

Inflation Data and Oil Markets Take Center Stage

Investor attention is now shifting toward Thursday’s release of the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure. Markets are particularly focused on core PCE data, which excludes volatile food and energy prices and is expected to show continued inflationary pressures.

Meanwhile, energy markets provided some relief as Brent crude oil prices fell more than 3% after reports suggested progress toward a potential long-term agreement between U.S. and Iranian officials. Additional support came from the U.S. Treasury’s authorization of Iranian oil sales for a temporary 60-day period, helping ease supply concerns and lowering energy prices.

Looking ahead, market direction will likely be determined by the interaction between inflation trends, Federal Reserve policy expectations, and economic growth. While volatility may persist in the near term, investors continue to find support in a resilient labor market, strong corporate earnings, and ongoing investment in strategic sectors such as artificial intelligence and advanced manufacturing.