U.S. stocks were slightly lower in cautious trading on Monday, as chip shares bounced back from last week's bruising selloff and investors shrugged off a new Chinese AI model. Global oil prices pulled back some after briefly topping $90 a barrel on fresh U.S.-Iran clashes.

The Dow Jones Industrial Average fell 307.16 points, or 0.59%, to 51839.26. The S&P 500 lost 14.41 points, or 0.19%, to 7443.28, while the Nasdaq Composite edged down 12.17 points, or 0.05%, to 25508.07. According to preliminary data, there were 1011 advancing issues and 1718 declining issues on the NYSE.

Chip stocks led the gainers, with Micron, Sandisk and Seagate among the best performers, a sharp reversal from Friday when those same names posted double-digit losses. The recovery came even as Alibaba previewed a new large-language model, Qwen3.8 Max, that it said was second only to Anthropic's Fable 5, with 2.4 trillion parameters. Markets took the announcement largely in stride, a contrast to Friday's reaction to Moonshot AI's Kimi K3, which sparked a global selloff in AI stocks.

The muted response reflected growing investor comfort with AI competition from China, analysts said.

"We believe long-term success will require immense resources, top talent, and a loyal paying customer base," said Alicia Yap of Citi Research, adding that companies with full-stack capabilities like Alibaba could be better positioned to lead in the AI race. Alibaba shares rose 4.7%.

Brent crude oil briefly surged past $90 a barrel--its highest level since the early days of the Iran war--before pulling back after Iran said it had received proposals from mediators aimed at preventing further escalation. Oil gained following fresh U.S. strikes on Iranian infrastructure during the weekend. The average price of a gallon of gasoline in the U.S. crossed the $4 mark for the first time in weeks on Monday, according to AAA.

A judge temporarily blocked the $81 billion merger between Warner Bros. Discovery and Paramount Skydance, sending shares of both companies lower. AMC Entertainment surged about 27% after the movie theater chain reported a 14% jump in revenue, driven by a stronger domestic box office. Ryanair fell 5.8% after the budget airline reported a drop in first-quarter profit, hurt by lower fares and rising fuel costs from the Middle East conflict. Jersey Mike's filed to go public at a valuation of up to $8 billion, pricing its shares at between $21 and $25.

In the U.K., Andy Burnham was sworn in as prime minister, the country's sixth in seven years, after predecessor Keir Starmer resigned. The British pound strengthened against the dollar ahead of Burnham taking office, helped by reports that he would pick fiscally conservative Shabana Mahmood as finance minister. U.K. gilt yields edged higher.

Yields on U.S. Treasury bonds increased. The 10-Year yield rose 0.055 percentage point to 4.597%. The US Dollar Index increased by 0.19 percentage point, according to the ICE. The euro was last seen at $1.14. Gold lost $2.40 to $4010.30 per troy ounce.

The economic calendar is thin in the first half of the week and Fed policymakers are in a blackout period ahead of next Wednesday's interest-rate decision, leaving earnings as the main focus for markets. Alphabet, Tesla and IBM report Wednesday, with Intel and American Airlines due Thursday.

Write to Anvee Bhutani at anvee.bhutani@wsj.com

(END) Dow Jones Newswires

By Anvee Bhutani

U.S. stocks were slightly lower in cautious trading on Monday, as chip shares bounced back from last week's bruising selloff and investors shrugged off a new Chinese AI model. Global oil prices pulled back some after briefly topping $90 a barrel on fresh U.S.-Iran clashes.

The Dow Jones Industrial Average fell 307.16 points, or 0.59%, to 51839.26. The S&P 500 lost 14.41 points, or 0.19%, to 7443.28, while the Nasdaq Composite edged down 12.17 points, or 0.05%, to 25508.07. According to preliminary data, there were 1011 advancing issues and 1718 declining issues on the NYSE.

Chip stocks led the gainers, with Micron, Sandisk and Seagate among the best performers, a sharp reversal from Friday when those same names posted double-digit losses. The recovery came even as Alibaba previewed a new large-language model, Qwen3.8 Max, that it said was second only to Anthropic's Fable 5, with 2.4 trillion parameters. Markets took the announcement largely in stride, a contrast to Friday's reaction to Moonshot AI's Kimi K3, which sparked a global selloff in AI stocks.

The muted response reflected growing investor comfort with AI competition from China, analysts said.

"We believe long-term success will require immense resources, top talent, and a loyal paying customer base," said Alicia Yap of Citi Research, adding that companies with full-stack capabilities like Alibaba could be better positioned to lead in the AI race. Alibaba shares rose 4.7%.

Brent crude oil briefly surged past $90 a barrel--its highest level since the early days of the Iran war--before pulling back after Iran said it had received proposals from mediators aimed at preventing further escalation. Oil gained following fresh U.S. strikes on Iranian infrastructure during the weekend. The average price of a gallon of gasoline in the U.S. crossed the $4 mark for the first time in weeks on Monday, according to AAA.

A judge temporarily blocked the $81 billion merger between Warner Bros. Discovery and Paramount Skydance, sending shares of both companies lower. AMC Entertainment surged about 27% after the movie theater chain reported a 14% jump in revenue, driven by a stronger domestic box office. Ryanair fell 5.8% after the budget airline reported a drop in first-quarter profit, hurt by lower fares and rising fuel costs from the Middle East conflict. Jersey Mike's filed to go public at a valuation of up to $8 billion, pricing its shares at between $21 and $25.

In the U.K., Andy Burnham was sworn in as prime minister, the country's sixth in seven years, after predecessor Keir Starmer resigned. The British pound strengthened against the dollar ahead of Burnham taking office, helped by reports that he would pick fiscally conservative Shabana Mahmood as finance minister. U.K. gilt yields edged higher.

Yields on U.S. Treasury bonds increased. The 10-Year yield rose 0.055 percentage point to 4.597%. The US Dollar Index increased by 0.19 percentage point, according to the ICE. The euro was last seen at $1.14. Gold lost $2.40 to $4010.30 per troy ounce.

The economic calendar is thin in the first half of the week and Fed policymakers are in a blackout period ahead of next Wednesday's interest-rate decision, leaving earnings as the main focus for markets. Alphabet, Tesla and IBM report Wednesday, with Intel and American Airlines due Thursday.

Write to Anvee Bhutani at anvee.bhutani@wsj.com

(END) Dow Jones Newswires

July 20, 2026 16:56 ET (20:56 GMT)

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