Tech and Semiconductors Drag Wall Street Lower
Wall Street’s main indexes closed lower on Monday, August 24, 2026, as a sharp sell-off in technology and semiconductor stocks weighed on the S&P 500 and the Nasdaq Composite. The Dow Jones Industrial Average managed to eke out a small gain, but the broader market struggled under the weight of megacap tech names.
Investors dumped shares of chipmakers and software giants, with the Philadelphia Semiconductor Index falling by more than 2%. Nvidia (NVDA) led the decline, dropping 3.8% ahead of its quarterly earnings report scheduled for Wednesday, August 26. Advanced Micro Devices (AMD) and Intel (INTC) also slipped, down 2.9% and 1.7%, respectively.
Why Iran Sanctions and AI Data Centers Are Spooking Investors
The sell-off was triggered by two key factors. First, the United States is preparing to impose additional sanctions on Iran, according to a senior administration official who spoke on Monday. The new measures are expected to target Iran’s oil exports and financial networks, raising concerns about supply disruptions and geopolitical tensions in the Middle East.
Second, mounting political pushback on AI data centers is creating uncertainty for tech investors. Several U.S. lawmakers have introduced bills to regulate the energy consumption and water usage of large-scale data centers, which could raise operating costs for companies like Microsoft (MSFT) and Alphabet (GOOGL). On Monday, MSFT fell 1.9% and GOOGL lost 2.1%.
Nvidia Earnings: A Key Catalyst for the AI Trade
All eyes are now on Nvidia’s earnings report, due out after the bell on Wednesday. Analysts expect the company to post revenue of $28.7 billion for its fiscal second quarter, up 112% year-over-year, driven by continued demand for its AI accelerators. However, any guidance miss could trigger a broader sell-off in AI-related stocks, given Nvidia’s outsized weighting in major indices.
Options markets are pricing in a potential swing of more than 9% in Nvidia’s share price following the report, according to data from Trade Alert. That would be one of the largest moves for the stock in recent quarters, reflecting the high stakes for the entire tech sector.
Fed Inflation Data Could Shift Rate Expectations
Adding to the week’s catalysts, the Federal Reserve’s preferred inflation gauge—the core PCE price index—is due out on Friday, August 28. Economists surveyed by Dow Jones expect a 0.2% month-over-month increase, which would keep the annual rate at 2.7%. A hotter-than-expected print could force the Fed to delay rate cuts, putting further pressure on growth stocks.
Currently, futures markets imply a 65% probability of a 25-basis-point rate cut at the Fed’s September meeting, down from 75% a week ago. The upcoming inflation data will likely be the deciding factor, as Fed officials have emphasized that they need more confidence that inflation is on a sustainable path toward the 2% target.
What to Watch: Jobs Report and Oil Prices
Beyond Nvidia and the PCE report, investors will also be watching the August jobs report, scheduled for release on Friday, September 4. A strong labor market could complicate the Fed’s easing timeline, while a weak reading might accelerate it.
Oil prices are another key variable. Brent crude settled at $79.50 per barrel on Monday, up 1.2% on the Iran sanctions news. If prices spike above $85, it could stoke inflation fears and dampen risk appetite, adding to the market’s volatility.
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