The Dow Jones Industrial Average closed lower by 273 points to 53,459.78 on Monday, as rising concerns in the Middle East weighed on investor sentiment. The decline marks a significant drop from the prior session, with the index shedding more than 250 points during trading hours.

Session performance

All three major U.S. indices finished the session in negative territory. The S&P 500 fell 0.52% to close at 7,745.06, while the Nasdaq Composite declined 0.32% to end at 26,644.91.

The broader market weakness followed a mixed week for equities. While the S&P 500 gained 0.4% and the Nasdaq rose 0.1% over the previous five days, the Dow had already fallen 0.6% for the week before Monday's session.

Market sentiment and sector moves

Despite the daily losses, investor sentiment remained relatively stable. The CNN Money Fear and Greed Index recorded a reading of 59.9, down from a prior reading of 64, but staying within the "Greed" zone. This indicates that while fear is exerting some pressure on prices, greed continues to dominate market psychology.

Sector performance was largely negative, with communication services, consumer staples, and financial stocks recording the biggest losses. However, energy stocks bucked the trend, closing the session higher.

Economic data and earnings highlights

On the economic front, manufacturing activity showed strength. The New York Fed’s Empire State Manufacturing Index surged to 20.6 in August from 15.6 in July, surpassing market estimates of 11. Additionally, the NAHB/Wells Fargo Housing Market Index rose to 35 in August from 34 in the previous month.

In corporate earnings, shares of INVO Fertility Inc. (NASDAQ: IVF) jumped over 60% after reporting better-than-expected second-quarter EPS results. Investors are now awaiting results from Home Depot Inc. (NYSE: HD), Amer Sports Inc. (NYSE: AS), and Toll Brothers Inc (NYSE: TOL).

What the Numbers Show

The divergence between the strong manufacturing data and the equity sell-off suggests that geopolitical risks are currently overriding fundamental economic improvements. While the Empire State Index beat estimates significantly, the market's focus remains on Middle East tensions, keeping the Fear and Greed Index in a cautious but still greedy posture.

US stock markets opened with mixed signals on Monday, characterized by a decline in the Dow Jones Industrial Average and modest gains in technology-heavy indices. The Dow fell 0.38% to close at 53,525.83, while the NASDAQ Composite rose 0.09% to 26,753.90. The S&P 500 also posted a slight decline, dropping 0.16% to 7,773.83.

Sector Performance

Sectoral performance diverged sharply during the session. Industrials shares emerged as a leading sector, rising 0.2%. Information technology shares also performed well, rising 0.4%. In contrast, consumer staples stocks lagged significantly, falling 1%.

Economic Data

The New York Federal Reserve's Empire State Manufacturing Index provided a positive economic signal, surging to 20.6 in August from 15.6 in the previous month. This reading significantly topped market estimates of 11, indicating stronger-than-expected manufacturing activity in the region.

Top Movers

Individual equity movements were volatile, with several small-cap stocks posting double-digit gains and losses.

Equities Trading Up

• OmniAb Inc (NASDAQ: OABI): Shares shot up 18% to $4.00 after the company revised its FY26 cash and cash equivalent guidance above prior expectations. The company announced a global collaboration and license agreement with Eli Lilly and Company for a new ion channel program.
• INVO Fertility Inc (NASDAQ: IVF): Shares surged 158% to $2.46 after reporting better-than-expected second-quarter earnings per share results.
• argenx SE – ADR (NASDAQ: ARGX): Shares gained 15% to $978.31 after reporting positive topline results from its Phase 3 ALKIVIA study.
• IP Strategy Holdings Inc (NASDAQ: IPST): Shares shot up 277% to $8.29, following a 6% rise on Friday.
• Trugolf Holdings Inc (NASDAQ: TRUG): Shares gained 62% to $1.57, building on an 11% gain from Friday.

Equities Trading Down

• EyePoint Inc (NASDAQ: EYPT): Shares dropped 71% to $4.26 after announcing topline results from LUGANO, the first pivotal Phase 3 clinical trial for DURAVYU.
• Enovix Corp (NASDAQ: ENVX): Shares fell 17% to $3.63. Enovix announced that Raj Talluri has resigned his position as CEO and director. The company also appointed CFO Ryan Benton as interim CEO.
• Fast Track Entertainment (NASDAQ: FTRK): Shares fell 40% to $0.17.
• Nexgel Inc (NASDAQ: NXGL): Shares declined 38% to $0.35 following weak quarterly results.

Global Markets

European shares were mostly lower. The eurozone's STOXX 600 fell 0.1%. Specific indices declined as follows:

• Spain's IBEX 35 slipped 0.4%
• London's FTSE 100 fell 0.2%
• Germany's DAX declined 0.2%
• France's CAC 40 dropped 0.5%

Asian markets closed mostly higher. Japan's Nikkei 225 gained 0.74%, Hong Kong's Hang Seng index surged 1.34%, and China's Shanghai Composite rose 1.41%. India's BSE Sensex was an exception, falling 0.36%.

Commodities

Commodity prices showed upward movement for precious metals and energy, while industrial metals faced headwinds.

What the Numbers Show

The divergence between the broad market decline in the Dow and the sharp rise in the Empire State Manufacturing Index suggests that macroeconomic data alone did not drive immediate equity valuations higher. Instead, sector-specific dynamics, particularly strength in industrials and information technology versus weakness in consumer staples, appeared to dictate the mixed opening. Additionally, the extreme volatility in individual stocks like IP Strategy Holdings (277% gain) and EyePoint (71% loss) highlights significant price discovery events unrelated to the broader index movements.