The S&P 500 index fell for a third consecutive trading day, weighed down by rising bond yields and concerns over persistent inflation. Semiconductor stocks gave up intraday gains, with Nvidia declining ahead of its earnings report on Wednesday.
The S&P 500 index dropped 0.7%, while the technology-heavy Nasdaq 100 index fell 0.6%. The Philadelphia Semiconductor Index ended largely flat after relinquishing a 1.9% gain.
U.S. equities continued to be pressured by a sharp rise in Treasury yields, with the 30-year yield approaching 5.2% and the 10-year yield surpassing 4.65%.
An economist noted that the increase in yields "raises the cost of capital and will weigh on equity valuations," particularly as a series of major consumer companies are set to report earnings this week.
Market attention also remained on oil price movements. The U.S. President's recent threat to potentially resume strikes against Iran in the coming days if no deal is reached was noted. While a decision to delay planned strikes earlier this week helped ease upward pressure on oil prices, crude has still surged more than 50% since the onset of conflict, continuing to fuel inflationary pressures.
Commentary from a research firm suggested that a stagflationary macroeconomic environment does not necessarily have to drag down the stock market, provided that "corporations can still expand their profit margins."
Home Depot's stock turned positive after reporting mixed quarterly results. Citigroup shares fell 2% after an analyst downgraded the stock.
At the close, the S&P 500 was down 0.7% at 7,353.61; the Dow Jones Industrial Average fell 0.7% to 49,363.88; the Nasdaq Composite Index declined 0.8% to 25,870.71; the Nasdaq 100 Index dropped 0.6% to 28,818.84; and the Russell 2000 Index decreased 1% to 2,747.074.
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