Nasdaq leads Wall Street lower as oil and bond yields pressure tech stocks
Synopsis
US markets ended mixed on Monday, with the Nasdaq and S&P 500 slipping as investors pulled back from technology stocks amid rising oil prices and surging Treasury yields. Markets remained volatile as traders assessed the inflation risks tied to the Iran conflict and continued disruption around the Strait of Hormuz.
US markets ended mixed on Monday, with the Nasdaq and S&P 500 slipping as investors pulled back from technology stocks amid rising oil prices and surging Treasury yields. Markets remained volatile as traders assessed the inflation risks tied to the Iran conflict and continued disruption around the Strait of Hormuz.
Key highlights
- Nasdaq and S&P 500 closed lower on Monday
- Treasury yields hit highest level since February 2025
- Oil prices surged on Strait of Hormuz disruption fears
- Tech and semiconductor stocks led market declines
- Energy shares outperformed as crude prices climbed
- Investors remain focused on inflation and Federal Reserve policy
Rising yields weigh on growth stocks
The benchmark 10-year US Treasury yield climbed to its highest level since February 2025 earlier in the session, reflecting growing investor concern that inflation could remain elevated for longer.
Higher bond yields typically pressure technology and growth stocks because they increase borrowing costs and reduce the appeal of future earnings.
The tech-heavy Nasdaq Composite fell 0.51 per cent, while the S&P 500 edged down 0.07 per cent. The Dow Jones Industrial Average managed a modest gain of 0.32 per cent.
Oil prices remain key market driver
Oil prices rose more than 3 per cent during the session as traders continued monitoring supply risks tied to the Middle East conflict.
However, crude prices trimmed some gains after Donald Trump said he had paused a planned military strike on Iran to allow negotiations to continue.
Trump warned the US remained prepared to resume attacks if talks failed.
Technology rally loses momentum
Monday marked the second straight decline for both the Nasdaq and S&P 500 after a strong rally driven by artificial intelligence optimism and robust earnings from major technology companies.
The Philadelphia Semiconductor Index dropped 3.3 per cent, with chipmakers among the session’s biggest drags.
Nvidia fell 1.3 per cent ahead of its closely watched earnings results later this week.
The broader information technology sector was the weakest performer in the S&P 500, declining nearly 1 per cent.
Energy stocks outperform
While tech shares weakened, energy companies benefited from the rise in crude prices.
The S&P 500 energy sector gained 1.8 per cent as investors positioned for the possibility of prolonged supply disruptions in global oil markets.
Inflation concerns return to focus
Investors are increasingly worried that elevated oil prices could feed into broader inflation pressures.
Market expectations for another US interest rate hike have risen sharply following recent inflation data and ongoing geopolitical instability.
According to CME FedWatch data, traders are now pricing in a growing probability of a Federal Reserve rate increase before year-end.
Major companies in focus
Several major corporate developments also drew investor attention:
- Walmart rose ahead of upcoming earnings results
- Dominion Energy surged after a takeover agreement with NextEra Energy
- Regeneron slumped after disappointing clinical trial results
What it means for Australia
The renewed volatility on Wall Street could affect Australian investors and markets through:
- Weaker sentiment toward global technology stocks
- Rising inflation concerns
- Pressure on interest rate expectations
- Increased volatility across ASX growth sectors
- Potential strength in Australian energy producers
Australian super funds and investors remain heavily exposed to US equity markets, particularly large-cap technology shares.
What happens next?
Markets are now focused on:
- Upcoming Nvidia earnings results
- Federal Reserve policy signals
- Oil price movements
- Iran-US negotiations
- Further Treasury yield moves
Investors are expected to remain cautious while inflation and geopolitical risks continue to dominate sentiment.
FAQs
Q1: Why did the Nasdaq fall?
Technology stocks came under pressure from rising Treasury yields and concerns about persistent inflation.
Q2: Why are bond yields rising?
Investors fear high oil prices and Middle East tensions could keep inflation elevated and delay interest rate cuts.
Q3: How did oil prices affect markets?
Higher oil prices boosted energy stocks but increased concerns about inflation and economic growth.
Q4: Why are Nvidia earnings important?
Nvidia is viewed as a key indicator of demand for artificial intelligence infrastructure and semiconductor growth.
Q5: What could this mean for Australian investors?
Australian markets may see increased volatility, particularly across technology and growth-focused sectors.
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I write about markets, money, and the macro forces that move them. Passionate about turning complex economic trends into sharp, easy-to-understand stories. Off the clock, it’s hip hop, rock, reggae -- and a mix of cricket and basketball.
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