US stocks mixed as tech earnings, Fed decision loom; chip index drops

Wall Street experienced a mixed trading session on Monday as investors braced for a significant week of corporate earnings and a key Federal Reserve policy announcement. The Dow Jones Industrial Average closed higher, gaining 262.83 points, or 0.51%, to reach 52,210.08.

However, the tech-heavy Nasdaq Composite Index dipped slightly, falling 0.18% to 24,932.08. Similarly, the Philadelphia Semiconductor Index registered a notable decline of 2.23%, closing at 11,554.88. Taiwan Semiconductor Manufacturing Company's ADR also fell over 1%, ending the day at $399.09.

Market sentiment was influenced by anticipation surrounding quarterly results from tech giants like Microsoft, Amazon, Meta, and Apple. Last week's earnings reports from Tesla and Alphabet had already sparked investor concerns about the sustainability of the AI-driven rally. Adding to the pressure, China's semiconductor industry is showing increased competitiveness with the domestic production of DUV chip manufacturing tools and the Shanghai listing of chipmaker CXMT.

Investor caution was also fueled by the prospect of the Federal Reserve raising interest rates. While traders predict a 62% chance of rates remaining unchanged, there's a 38% possibility of a quarter-point hike. This uncertainty, coupled with fluctuating oil prices, contributed to the day's mixed market performance.