- US stocks fell due to rising oil prices, higher Treasury yields, and tech stock sell-offs
- Brent crude rose over 2% after US rejected Iran's ceasefire proposal, spiking inflation fears
- 10-year Treasury yields topped 5.2%, increasing pressure on growth and tech stock valuations
US stocks came under pressure on Monday as investors grappled with three key headwinds: surging oil prices, a sharp rise in Treasury yields, and a sell-off in major technology stocks.
The combination is weighing on risk appetite across Wall Street, with higher oil prices raising inflation concerns and elevated Treasury yields increasing pressure on equity valuations
The Nasdaq Composite fell 324.76 points, or 1.20%, to 26,743.96 at 10:59 a.m. ET. The Dow Jones Industrial Average dropped 393.39 points, or 0.76%, to 51,435.23, while the S&P 500 declined 0.90% to 7,673.45.
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1. Oil Prices Jump
Crude prices rose sharply after US President Donald Trump rejected an Iranian proposal linked to a ceasefire and reopening of the Strait of Hormuz.
Brent crude climbed more than 2% to $106.79 a barrel, while West Texas Intermediate crude traded around $94.40.
The renewed oil spike has revived concerns over inflation. More expensive energy could keep price pressures elevated and make it harder for the Federal Reserve to cut interest rates.
2. Treasury Yields Surge
The second major pressure point was the bond market. The benchmark 10-year Treasury yield climbed above 5.2%, while the 30-year yield topped 5.5%, with both hovering around multi-year highs.
Higher yields tend to weigh particularly heavily on growth and technology stocks because they increase financing costs and reduce the relative appeal of future earnings.
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3. Tech Stocks Slide
The rise in yields triggered renewed selling in technology and AI-linked stocks, dragging the Nasdaq lower.
Advanced Micro Devices fell about 3%, Micron Technology declined roughly 2%, Microsoft slipped 2% and Meta Platforms dropped nearly 4%. Amazon was also lower.
The weakness followed a strong week for technology shares, with Meta surging nearly 13% and Microsoft gaining more than 4%.
Nvidia was a notable exception. The chipmaker rose after announcing an additional $150 billion share-buyback authorisation, taking its total repurchase programme to $235 billion.
The investors are now turn to a packed economic calendar. The August personal consumption expenditures inflation report, the Federal Reserve's preferred gauge, is due Wednesday, followed by US manufacturing data Thursday and the September jobs report Friday.
The data could offer fresh clues on whether persistent inflation and higher energy prices will keep US interest rates elevated for longer.
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