US stocks traded mixed on Monday as investors kept a close watch on Treasury yields and oil prices ahead of the release of the Federal Reserve's minutes from its September meeting later this week.
The Dow Jones Industrial Average fell 0.17%, or 90.10 points, while the S&P 500 gained 0.17%, or 13.01 points. The Nasdaq 100 outperformed, rising 0.39%, or 105.28 points. Investors remained cautious as rising Treasury yields continued to weigh on sentiment and raised concerns that the US Federal Reserve could keep interest rates higher for longer.
The benchmark 10-year US Treasury yield rose nearly 3 basis points to 5.303%, while the 30-year Treasury yield also climbed around 3 basis points to 5.663%. Both yields have surged to multiyear highs in recent weeks as traders assessed the outlook for inflation and interest rates. Higher yields can put pressure on equity valuations by increasing borrowing costs and reducing the relative attractiveness of risk assets.
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The Federal Reserve raised its overnight interest rate by 25 basis points last month. Investors will get greater insight into the central bank's thinking when the minutes of its September meeting are released on Wednesday.
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Oil prices were mixed on Monday, adding another variable for investors to monitor. Brent crude futures rose 0.3% to $102.67 a barrel, while US West Texas Intermediate crude fell around 0.6% to $88.92 a barrel.
Geopolitical uncertainty is another major factor influencing global markets, particularly because of the disruption surrounding the Strait of Hormuz.
Iranian Parliament Speaker Mohammad Bagher Qalibaf said on Sunday that the Strait of Hormuz would not be reopened until the United States fulfils seven conditions linked to the June interim agreement between Tehran and Washington.
Qalibaf said Iran's position was “completely clear and firm” and that the strait would remain closed until the seven conditions under the Islamabad Memorandum of Understanding are met.
Markets are now looking ahead to Wednesday's release of the Fed's September meeting minutes. Investors will scrutinise the document for clues on the central bank's approach to inflation and interest rates.
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