NEW YORK: US stock indexes extended losses on Monday, with the Nasdaq leading declines as semiconductor shares came under pressure, while surging Treasury yields and oil prices revived concerns that inflation and borrowing costs could remain elevated.
The 10-year Treasury yield, the benchmark for global borrowing costs, was at 4.630 percent, having climbed to its highest level since February 2025 earlier in the session.
The bond-market selloff was fueled by a surge in oil prices, which has stoked concerns of inflation potentially keeping borrowing costs elevated as efforts to end the Iran war appeared to stall.
Oil prices
also moved higher, with Brent crude up 1.4 percent. Prices had briefly turned lower earlier in a volatile session after a report said the US had proposed a temporary waiver on Iranian oil sanctions. Iranian officials did not immediately comment.
“Investors are looking at interest rates and oil and starting to question how much of an impact this is going to have,” said Adam Turnquist, chief technical strategist at LPL Financial.
“On top of that, you’ve had a market that’s rallied from March lows, so I think it’s just the market taking a little bit of a breather and refocusing a little bit more on a complicated macro backdrop.”
The heavyweight information technology sector led declines on the S&P 500, with chip stocks among the biggest drags.
The Philadelphia SE Semiconductor index fell over 2 percent.
The gains in financial shares helped limit losses on the Dow.
Wall Street had rallied sharply in recent weeks, with the benchmark S&P 500 and the Nasdaq reaching record highs, as enthusiasm around artificial intelligence helped investors look past the inflationary threat from surging oil prices and the Iran war.
That rally, however, lost momentum on Friday as a rout in the bond market pushed yields higher.
Traders are now pricing in a more than 40 percent chance that the US Federal Reserve will raise interest rates by at least 25 basis points in January, according to CME’s FedWatch tool, after last week’s hotter-than-expected inflation readings.
At 12:04 p.m. ET, the Dow Jones Industrial Average fell 46.27 points, or 0.09 percent, to 49,479.90, the S&P 500 lost 31.42 points, or 0.42 percent, to 7,377.08 and the Nasdaq Composite lost 221.19 points, or 0.84 percent, to 26,003.96.