US stocks closed lower on Monday, with the Dow Jones Industrial Average shedding 344 points, as a surge in oil prices and Treasury yields renewed inflation concerns and pressured technology shares. The benchmark 10-year Treasury yield climbed above 5.2%, while the 30-year yield moved past 5.5%, both hovering near multiyear highs.
The S&P 500 fell 0.76% to 7,684.41, and the Nasdaq Composite dropped 0.91% to 26,822.09. The major averages trimmed their losses after reports indicated President Donald Trump remained open to providing sanctions relief to Iran on nuclear matters, which helped crude prices retreat from their highs.
Oil and Yields Weigh on Equities
Oil prices have been climbing in recent sessions amid uncertainty over a potential US-Iran peace deal. Crude initially jumped after Trump rejected an Iranian peace proposal, though expectations of talks involving Qatari mediators limited the advance. Higher oil and diesel prices have added to inflation worries, contributing to the rise in Treasury yields.
The increase in borrowing costs has made bonds more attractive relative to stocks and raised financing costs for companies and consumers. Investors are now reassessing the outlook for Federal Reserve policy, with CME FedWatch data showing a 70.3% probability of at least a 25-basis-point rate hike at the October meeting, up from 57.6% a week earlier and 17.7% a month earlier.
Tech and AI Stocks Slide, Nvidia Bucks Trend
Several major technology and AI-related stocks declined alongside the broader market. AMD and Micron fell about 4% and 2%, respectively, while Amazon and Microsoft each slipped roughly 1%. Meta Platforms dropped 4%.
Nvidia moved in the opposite direction after announcing an additional $150 billion share repurchase authorization, bringing its total buyback program to $235 billion. The announcement supported Nvidia shares even as other AI names retreated.
Company-specific news also weighed on the market. Boeing shares fell after the Federal Aviation Administration said software issues with the 737 MAX would delay certification of the MAX 10 until the agency is satisfied the problem has been addressed. Tesla also declined after JPMorgan lowered its price target, citing weak third-quarter deliveries.
Fed Officials and Economic Data in Focus
Fed Governor Lisa Cook said she expects inflationary pressure to persist in coming months due to AI-related demand and higher oil prices, though she did not indicate that additional rate hikes would necessarily be required.
Investors are now awaiting several economic releases that could influence monetary policy expectations. The August personal consumption expenditures price index, the Fed's preferred inflation measure, is due Wednesday, followed by US manufacturing data on Thursday and the September jobs report on Friday. These reports will provide further insight into inflation and labor-market conditions.
The latest pullback comes after a strong previous week for technology stocks, with Meta gaining nearly 13% and Microsoft rising more than 4%. The current decline reflects renewed pressure from oil prices, higher Treasury yields, and shifting expectations for Fed policy.
This article is for informational purposes only and does not constitute financial advice.
