US stock indices finished lower on Monday as escalating tensions between Washington and Tehran drove fresh volatility in the oil market and weighed on bonds. The S&P 500 slipped 0.8%, the Dow Jones Industrial Average lost 347 points, and the Nasdaq Composite declined 1.1%.
The renewed rally in crude prices heightened worries that stronger inflationary pressures could force the Federal Reserve to deliver additional interest-rate hikes. Bond selling accelerated after President Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, pushing the 10-year Treasury yield to its highest level in 19 years.
Investors are now focused on this week’s PCE inflation data and the monthly jobs report, which are expected to offer further clarity on the strength of the US economy and the Fed’s likely policy trajectory.
Tighter financial conditions continued to weigh on AI hyperscalers and semiconductor manufacturers, many of which are tapping debt markets at record levels. Among the megacaps, Microsoft declined 1.3%, Amazon fell 1.4%, and Meta dropped 4.8%. In the chip sector, Micron slid 2.6%, AMD lost 3.6%, and Intel sank 5.7%.
Nvidia was a notable outlier, gaining 1.7% after the company expanded its share repurchase program by a record $150 billion.
