US stocks fell on Monday as rising Treasury yields and higher oil prices put pressure on investors. The Dow Jones Industrial Average was down about 360 points, while the S&P 500 fell 0.49% and the Nasdaq Composite dropped 0.50%.
The rise in oil prices and interest rates has become a key concern for Wall Street. Higher oil prices can increase inflation pressure, while higher Treasury yields can make borrowing more expensive for consumers and businesses.
US stock market today
An Oppenheimer analyst cited by CNBC said recent moves in oil prices and interest rates could point to a “new normal” for markets. The analyst said the latest volatility does not necessarily mean markets are heading toward much higher volatility or major downside risk.
Treasury yields rise
Treasury yields moved higher on Monday as selling returned to global government bond markets. Rising crude oil prices and renewed worries about inflation added to the pressure on government bonds.
Also read: Why Nvidia is building AI safety tools as autonomous agents become more powerful
10-year Treasury yield
{{/usCountry}}Also read: Why Nvidia is building AI safety tools as autonomous agents become more powerful
10-year Treasury yield
{{/usCountry}}The benchmark 10-year Treasury yield climbed more than 3 basis points to 5.219%. The 10-year yield is closely watched by investors because it affects borrowing costs across the economy, including mortgage rates and other consumer loans. The 30-year Treasury yield also increased, rising about 2 basis points to 5.529%. At the same time, the 2-year Treasury yield gained more than 5 basis points to 4.916%.
Bond yields hit key highs
Treasury yields have already reached important highs in recent trading sessions. The 10-year yield rose on Thursday to its highest level since June 2007 before pulling back, while the 30-year yield reached its highest level since 2004.
S&P 500 and Nasdaq ETFs
The rise in bond yields was also reflected in major stock market ETFs. The SPDR S&P 500 ETF (SPY) fell about 0.33%, the Invesco QQQ Trust ETF (QQQ) dropped 0.61%, and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.56%.
Oil prices jump
Oil prices jumped on Monday as US-Iran talks remained stuck. The increase came after President Donald Trump rejected Iran's conditions for reopening the Strait of Hormuz, while saying Tehran was desperate to reach a deal.
Brent crude futures for November delivery traded at $108.27 a barrel, according to the report. WTI crude futures for November delivery traded at $95.46 a barrel and were up 3.2%. Oil prices have moved sharply higher since the war began in late February. Reuters reported that oil futures were nearly 50% above their levels before the war started, while prices for refined oil products had risen even more.
Oil prices and inflation
The jump in oil prices is important for investors because expensive crude can add to inflation. If energy costs remain high, markets could face more pressure from concerns that inflation will stay elevated.
Investors are now turning their attention to several major US economic reports due this week. The data could give Wall Street more clues about the health of the economy and the direction of inflation and interest rates.
Also read: Why is oil price rising? Brent jumps 2.5% after Trump rejects Iran peace proposal
US jobs and inflation data
The August JOLTS report is due on Tuesday. The report is expected to show US job openings falling slightly to about 7.23 million, down from 7.27 million in July.
On Wednesday, investors will get the latest Personal Consumption Expenditures (PCE) price index. The PCE index is the Federal Reserve’s preferred measure of inflation. This makes the report important for investors who are watching what could happen to interest rates.
Wednesday will also bring the third estimate of US GDP for the second quarter. The data will give investors a clearer picture of how the US economy performed during the period. Investors will use the updated figure to assess how strongly the US economy grew during the period.
The September jobs report is scheduled for Friday. The report will include nonfarm payrolls and the unemployment rate. These numbers will give investors a fresh look at the US job market.
Company earnings will also give investors more clues about the economy and how businesses are doing. Micron Technology will report its fiscal fourth-quarter results on Wednesday. Investors will closely watch its results for updates on memory-chip demand and AI business.
Nike will report its fiscal first-quarter results on Thursday. Investors will look at the results to see how strong consumer demand is and how the company’s business is performing.
For Wall Street, higher Treasury yields, rising oil prices and new economic data are making investors cautious. The S&P 500 and Nasdaq fell on Monday as investors reacted to changes in bond yields and oil prices.