Dow Rises, Nasdaq Slips as Oil Drops Before Fed Decision

US equity indices moved in separate directions on Monday. The Dow Jones Industrial Average added 0.5%, the S&P 500 was roughly flat, and the Nasdaq Composite dropped 0.2% for a fourth straight session as Nvidia shares lost 5%.

Crude Oil Falls Sharply

Brent crude for October delivery dropped 6.3% to close at $85.87 a barrel, retreating from levels above $100 recorded the previous week. That earlier spike followed direct conflict between the United States and Iran that disrupted shipping through the Strait of Hormuz and stoked fears over global energy supplies. A pause in hostilities eased some of that pressure.

Lower crude costs can soften future inflation readings, though the effect on consumer prices is not immediate. Freight, fuel, and production expenses tied to the earlier price spike are still working through supply chains.

Investors comparing energy shocks with broader portfolio risk can find more detail in how swings in oil prices ripple through investment portfolios.

Fed Decision Looms Over Markets

The Federal Reserve's two-day meeting wraps up Wednesday, July 29, with the policy statement due at 2:00 p.m. Eastern Time and a press conference to follow at 2:30 p.m. Traders had priced in roughly a 36% chance of a rate increase heading into the decision.

The central bank's language on tariffs and fuel costs will be closely watched. A hawkish tone or an actual rate hike could push borrowing costs higher and weigh on stocks, while a hold paired with cautious guidance may support the market.

Chipmakers Diverge

Semiconductor stocks split sharply. Nvidia fell 5% and Micron Technology declined 2.3%, while Microsoft gained 1.9% and Apple rose 1.2%. Given their outsized weight in major indices, moves in these names alone can shift the broader market even when other sectors stay calm.

Micron's slide follows a volatile stretch for chip stocks after a strong earnings report from the company briefly lifted US futures. Payment and communications names fared better, with Alphabet, Charter Communications, Comcast, American Express, Capital One, Visa and Mastercard all closing higher.

Earnings Calendar Could Set the Tone

Results are due this week from Sherwin-Williams, Boeing and Visa, followed by Microsoft, Amazon and Apple. Analysts will watch for signs that consumer spending is holding up against higher fuel, borrowing and import costs, along with whether AI-related capital spending is translating into earnings growth.

The 10-year Treasury yield eased to 4.65% from 4.69% at Friday's close as traders positioned ahead of the Fed meeting, a shift that comes amid broader talk of a possible $165 billion rotation out of equities and into bonds.