S&P 500 is little changed as traders eye oil prices and bond yields
The S&P 500 was relatively unchanged on Monday after a record-setting week as traders monitored oil prices and bond yields while awaiting further developments with the conflict in the Middle East.
The broad market index traded around the flatline, as did the Nasdaq Composite. The Dow Jones Industrial Average added 116 points, or 0.4%.
Oil prices were lower. West Texas Intermediate futures lost 1% to trade above $103 per barrel, while Brent crude shed 1% to around $108 a barrel.
Those moves come during a delicate time for stocks. The S&P 500 and Nasdaq hit fresh record highs last week, while the Dow briefly reclaimed the 50,000 level.
However, the major averages suffered a setback Friday, as sovereign bond yields around the world rose. The U.S. 30-year Treasury bond yield hit its highest level in around a year. It was last little changed alongside the 10-year Treasury yield. In the U.K., the 30-year Gilt yield had scaled to levels not seen since the late 1990s, along with long-dated Japanese bond yields.
Tech stocks, which had been leading the market to record highs got battered by the spike in yields. The Nasdaq-100 index dropped 1.5% on Friday, marking its worst one-day performance since March 27.
Tensions are still high between Iran and the U.S., keeping oil prices elevated as the path forward for the conflict remains unclear. On Sunday, President Donald Trump said Iran had to “get moving” or there “won’t be anything left.” Peace negotiations between both countries have been deadlocked.
On top of that, new inflation data released last week makes the Federal Reserve cutting rates anytime soon a long shot.
“The financial markets expect interest rates to remain higher for longer, notwithstanding President Trump’s demands that Kevin Warsh, newly instated as Fed chief, get rates down,” wrote Ed Yardeni, president of Yardeni Research. “But the macroeconomic backdrop no longer supports an easing bias, let alone a rate cut.”
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