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U.S. stock markets fell sharply on Monday as rising oil prices and climbing bond yields combined to drag major indexes lower. The S&P 500 dropped 0.8 percent, giving back most of its gains from the previous week. Those gains had brought the index close to its all-time high. The Dow Jones Industrial Average fell 372 points, or 0.7 percent, by 11:45 a.m. Eastern time, while the Nasdaq composite declined one percent.
Oil Prices Push Markets Lower
The most actively traded Brent crude contract rose 2.8 percent to US$100.19 per barrel, pushing oil above US$101 before U.S. markets opened. That surge weighed heavily on stocks across most sectors. Airlines took some of the hardest hits. American Airlines fell 3.8 percent, and United Airlines lost 3.6 percent, as higher fuel costs threatened their profit margins.
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Oil prices have swung sharply in recent weeks due to uncertainty over the Strait of Hormuz. The strait is a critical shipping route for Middle Eastern oil. Tanker traffic through the waterway remains disrupted because of the ongoing conflict involving Iran. Over the weekend, President Donald Trump rejected an Iranian offer to reopen the strait and resume nuclear talks. “I’d like to make a deal, too,” Trump said on Saturday. “But that deal would not be acceptable.” However, U.S. officials later indicated that mediators were still working toward an agreement.
Brent crude remains significantly higher than the roughly US$72 per barrel it traded at before the United States and Israel attacked Iran in late February. As a result, fuel costs for consumers have risen sharply. The average price for a gallon of regular gasoline climbed to nearly $4.48, up from $3.13 a year ago, according to AAA.
Bond Yields Climb to Multi-Decade Highs
Rising oil prices have fueled inflation concerns, and those concerns pushed Treasury yields higher. The 10-year Treasury yield jumped to 5.26 percent from 5.17 percent late Friday. That level matches where yields stood in 2007, before the financial crisis sent them toward zero. Meanwhile, the 30-year Treasury yield rose to 5.58 percent from 5.49 percent, returning to levels last seen in 2004.
Higher yields make borrowing more expensive for businesses and consumers alike. They also put downward pressure on stock prices and other investments. Therefore, the combination of elevated oil prices and rising yields created a difficult environment for markets on Monday.
Gold Miners and Tech Stocks Feel the Pressure
Gold prices fell 3.9 percent on Monday, pulling mining stocks lower. Gold typically attracts investors during periods of high inflation. However, rising bond yields reduce its appeal because bonds begin to offer stronger returns. Gold pays investors nothing, so it struggles to compete when yields climb. Newmont, the Denver-based mining giant, fell 4.4 percent.
Canadian markets also declined. The Toronto Stock Exchange dropped about 0.75 percent. Gold and commodity-linked stocks led the losses. Agnico Eagle Mines fell roughly 4.5 percent, and Lundin Gold dropped approximately 5.5 percent.
One of the steepest individual losses on Wall Street came from MongoDB. The database company’s stock plunged 18.5 percent after it announced that CEO Chirantan “CJ” Desai stepped down immediately to pursue a senior role at Meta Platforms.
Nvidia Rises Despite Broader Market Weakness
Not all news was negative on Monday. Nvidia bucked the broader trend, rising two percent after announcing a major share buyback plan. The chip company approved a program to return up to an additional $150 billion to shareholders. That brings the total remaining size of its buyback program to $235 billion.
Nvidia built up the cash needed for such a move after strong demand for its artificial intelligence chips more than doubled its cash reserves in the first half of its fiscal year. Also on Monday, Nvidia unveiled a new security platform. The company said the platform can prevent AI agents from operating outside their intended boundaries.
AI stocks broadly have faced pressure in recent weeks. Industry leaders have called for slower development to allow safety measures to catch up with advancing technology. Despite that headwind, Nvidia’s buyback announcement gave its shares a boost on an otherwise difficult day for markets.
In international markets, European indexes delivered mixed results following weaker sessions across much of Asia. South Korea’s index fell 2.7 percent, while Shanghai’s benchmark dropped 1.7 percent, making them two of the larger declines globally on the day.
