U.S. stocks drifted modestly lower by midday Monday, with the S&P 500 down 0.2% to 7,772.93 after last week's record, as a jump in long-term Treasury yields offset a sharp rally in AI-linked optical and memory shares. The Dow Jones Industrial Average fell 172 points, or 0.3%, to 53,560, the Nasdaq 100 was flat at 30,033, and the Russell 2000 lost 0.3% to 3,059. Bond markets remained the main macro pressure point, with the 10-year Treasury yield climbing back above 4.71% and the 30-year yield rising to 5.29%, a fresh 19-year peak. At the same time, expectations for a near-term rate hike continued to fade after Fed Chair Kevin Warsh suggested a hike may not be his preferred response to higher prices, helping weaken the dollar and boost gold and silver ahead of Wednesday's FOMC minutes. In equities, the standout move was in AI optical interconnect and memory stocks. SanDisk rallied 10%, extending a 35% gain from the prior week, while Micron rose 6% after a bullish Bank of America note. The move gained further momentum after Commerce Secretary Howard Lutnick said the administration is "not in favor" of Apple sourcing DRAM and NAND flash memory from Chinese suppliers ChangXin Memory Technologies and Yangtze Memory Technologies, lifting the Roundhill Memory ETF 7%. Strong August manufacturing data from the New York Fed added to the hot-data backdrop, with the Empire State Manufacturing Index rising to 20.6 from 15.6 and beating the 11 consensus. Sector performance was narrow, with only three of eleven S&P 500 sectors in positive territory. Technology and energy led, while communication services and consumer staples lagged. Industry ETFs reflected a rotation into semiconductors, biotech and gold miners, while software, solar and retail underperformed. Among individual names, Coherent, Semtech, Credo, Lumentum, Marvell, Ciena and Corning all advanced on optimism that datacenter capital spending tied to AI still has room to grow, reinforced by reporting that Anthropic generated $11.5 billion in second-quarter revenue and is discussing what could be a record IPO. On the downside, weakness centered on restaurants, beverages, cable and mortgage finance, with Wingstop, UWM Holdings, Constellation Brands, Molson Coors and Charter Communications among the notable decliners.