U.S. stocks dip as bond yields hit multiyear highs and oil prices climb
The S&P 500 and Nasdaq fell on Monday while Treasury yields rose to levels not seen since 2007, and Brent crude edged above $106 a barrel amid ongoing geopolitical tensions.
U.S. equity markets slipped on Monday, with the S&P 500 down 0.7% and the Nasdaq Composite down 0.9%, as bond yields surged and oil prices rose. Brent crude regained ground above $106 a barrel after briefly touching $108 earlier in the session.
Mediators are scheduled to meet separately with U.S. and Iranian officials to discuss the stalemate over the conflict with Iran, according to reports. Iran’s foreign ministry said its foreign minister Abbas Araghchi would attend the talks, but no U.S. representatives were confirmed.
Reports that President Donald Trump was considering economic concessions for Iran were not verified by the outlet. Trump previously rejected an Iranian proposal to reopen the Strait of Hormuz, stating that any deal would not be acceptable.
The 10-year U.S. Treasury yield climbed to 5.27%, the highest level since mid-June 2007, while other Treasury securities also traded above 5%. The 30-year bond reached its peak since May 2004, and the 2-year yield hit its highest point since early 2024.
"The significant increase in oil prices so far this year hasn’t knocked the wind out of the global economy’s sails," market analyst Ed Yardeni wrote. "The question is whether rapidly rising interest rates will do so."
Yardeni added that higher rates worsen the outlook for large government deficits worldwide. Despite the pressure, analysts at Goldman Sachs said financial conditions have changed little since January, noting that the rise in interest rates has been largely offset by higher equity prices.
Sector performance this year has been uneven. The S&P 500 is up about 12% overall, driven largely by a 27% gain in information technology and a 38% rise in energy stocks. Health care, industrials and materials have each advanced around 10%, while real estate, consumer staples and communication services have posted gains under 7%. Utilities, financials and consumer discretionary sectors have declined.
Investors are watching upcoming central-bank meetings, including the Federal Reserve, for possible further rate adjustments that could influence markets.