US stocks closed mixed on Monday as semiconductor stocks fell and Treasury Secretary Scott Bessent announced “Operation Economic Outcast” — a series of expanded sanctions aimed at squeezing Iran.
The S&P 500 (^GSPC) declined by about 0.3%, and the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 0.8%. The Dow Jones Industrial Average (^DJI) rose by 0.3% as the lone index in the green after the major indexes posted weekly declines.
Investors rotated out of tech names as semiconductor stocks came under pressure. Sandisk (SNDK), Micron (MU), and other memory chip stocks dropped following a report over the weekend that Nvidia (NVDA) plans to raise prices for some of its AI servers.
Stocks were little changed, however, after Bessent outlined a plan to “sever every economic lifeline” to Iran and isolate the nation. In a press conference on Monday afternoon, Bessent detailed expanded sanctions on Iran and on any country that deals economically with it, stating that countries with ties to the regime will be “removed from the US dollar system.”
That raised questions about the US’s already tenuous relationship with China, which is the primary buyer of Iranian oil. While Bessent declined to discuss the specifics of individual countries, he emphasized that “no one is above the reach of US sanctions.”
The shift in the US’s approach to the Middle East standoff comes after US-Canada trade talks broke down over the weekend, and the US imposed new tariffs on Canadian goods. Canadian Prime Minister Mark Carney suspended negotiations and vowed to retaliate with like-for-like tariffs.
On Monday, President Trump hit back at Canada, vowing to raise tariffs on Canadian cars, auto parts, and steel to 50% starting Jan. 1, 2027, sending shares of General Motors (GM) and Ford (F) lower.
Meanwhile, attention is shifting toward Nvidia, whose earnings report on Wednesday could be a pivotal moment for the artificial intelligence story that has powered the stock market and set a high bar for the AI chip king.
