NEW YORK (AP) — Oil prices are back on the rise Monday, which is sending pressure higher within the U.S. bond market and U.S. stocks lower.
The S&P 500 fell 0.9% and gave back most of its gains from last week, which had brought it to the brink of its all-time high. The Dow Jones Industrial Average was down 394 points, or 0.8%, as of 11 a.m. Eastern time, and the Nasdaq composite was 1.2% lower.
Wall Street’s most influential stock, Nvidia, climbed after
it announced a historic funneling of cash to its investors through a buyback of its stock. But most of the rest of the market sank under the weight of a 2.6% rise for the most actively traded contract in the market for Brent crude oil to $99.96 per barrel.
Oil prices have been yo-yoing on uncertainty about when the war with Iran will allow tankers to flow freely again through the Strait of Hormuz and deliver oil from the Middle East to customers worldwide. The latest turns came after President Donald Trump said over the weekend he’s rejecting an offer from Iran to reopen the Strait of Hormuz and resume talks on its nuclear program.
“I’d like to make a deal, too,” Trump said. “But that deal would not be acceptable.”
Brent climbed as high as $101 per barrel in the morning, before the U.S. stock market opened for trading, but it pared its gains as U.S. officials said mediators were still working with Iran and the United States on a deal to end the fighting and open the strait.
For all its ups and downs, a barrel of Brent remains much higher than the roughly $72 it cost before the United States and Israel attacked Iran in late February. That has helped worsen inflation, with the average price for a gallon of regular gasoline up to nearly $4.48 from $3.13 a year ago, according to AAA.
Worries about inflation have in turn helped send Treasury yields much higher in the bond market. That pressures the economy because it makes borrowing money more expensive for everyone, while also undercutting prices for stocks and other investments.
The yield on the 10-year Treasury, which is the centerpiece of the bond market, jumped to 5.27% from 5.17% late Friday, which is a considerable move for the bond market. The 10-year yield is back to where it was in 2007, before the financial crisis and Great Recession sent yields toward zero.
The 30-year Treasury yield, whcih leaped to 5.57% from 5.49%, is back to where it was in 2024.
On Wall Street, stocks of airlines and other companies with big fuel bills sank because of the rise in oil prices.
United Airlines lost 3.3%, and American Airlines fell 3.5%.
Gold miners were also weak after the price of gold fell 3.9%. Gold has a reputation for helping to protect its investors from high inflation, but its price tends to weaken when yields are rising and causing bonds to pay their investors more in interest. Gold struggles to keep up because it pays its investors nothing.
Newmont, the Denver-based mining giant, sank 4.2%.
One of Wall Street's bigger losses hit MongoDB, which dropped 19.9% after the database company said its CEO, Chirantan “CJ” Desai, is stepping down immediately to pursue a senior role at Meta Platforms.
Such losses helped more than offset a 1.9% rise for Nvidia. The chip company said it approved a plan to send up to another $150 billion to its shareholders in a stock buyback plan, bringing the program’s total remaining size to $235 billion.
Nvidia has the power to do so after the frenzy around its chips used for artificial-intelligence technology helped it more than double the amount of cash on its books in the first half of its fiscal year. The company also on Monday unveiled a new security platform that the chipmaker said can stop artificial intelligence agents from going rogue.
AI stocks broadly have come under pressure after leaders of the industry said it needs to slow its development to give safety measures time to catch up.
In stock markets abroad, European indexes ticked higher following losses across much of Asia.
Indexes dropped 2.7% in Seoul and 1.7% in Shanghai for two of the world’s bigger moves.
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AP Business Writers Yuri Kageyama and Michelle Chapman contributed to this report.
