US stock indices were choppy on Monday afternoon as a steep drop in Treasury yields failed to sustain an early, broad-based equity rally that followed dovish comments from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average rose 0.4%, but the S&P 500 and Nasdaq Composite slipped 0.1% and 0.4%, respectively, as sharp losses in the semiconductor sector outweighed gains in financials and utilities.
Powell signaled that the central bank plans to look through the current energy price shock, even as West Texas Intermediate crude futures surged amid persistent threats to Red Sea exports and Iranian energy infrastructure. Although the 10-year Treasury yield fell sharply, chipmakers such as Micron and Lam Research dropped more than 5% as investors rotated into energy and utility giants hitting all-time highs.
Despite President Trump’s report of “serious discussions” regarding Iran, the CBOE Volatility Index remained elevated, with markets balancing resilient corporate earnings against the growing risk of a disruption to global energy infrastructure.
