US stocks opened cautiously on Monday as investors monitored rising Treasury yields, elevated oil prices, and ongoing tensions in the Middle East following a volatile end to last week’s record-setting rally.
The Dow Jones Industrial Average fell roughly 44 points, or 0.08%, while the S&P 500 was unchanged. The Nasdaq Composite was up by 0.13%.
The cautious start to the week followed Friday’s sharp market pullback, when technology stocks sold off amid a surge in global bond yields and renewed concerns that inflation could remain elevated for longer than expected.
The Nasdaq Composite fell 1.5% Friday, marking its worst single-session decline since late March, while the broader market retreated from fresh record highs reached earlier in the week.
The benchmark S&P 500 and Nasdaq Composite both closed at record highs last week, while the Dow briefly reclaimed the 50,000 level before losing momentum.
Treasury yields and oil prices remain central focus
Investor attention remained firmly fixed on the bond market on Monday as Treasury yields continued hovering near multi-month highs.
The benchmark 10-year Treasury yield climbed as high as 4.631% earlier in the session, reaching its highest level since February 2025 before easing slightly.
The move followed a broader global bond selloff that also pushed long-dated bond yields higher in the United Kingdom and Japan.
Analysts said the sharp rise in yields reflected growing concerns that inflationary pressures tied to rising energy prices could keep borrowing costs elevated for longer.
Oil prices remained elevated as geopolitical tensions involving Iran continued to unsettle global energy markets.
West Texas Intermediate crude traded above $103 per barrel, while Brent crude climbed above $107 and at one point reached approximately $110.66 per barrel.
Energy prices rose after efforts to end the Iran conflict appeared to stall following reports of a drone strike on a nuclear power plant in the United Arab Emirates.
President Donald Trump added to market concerns Sunday after warning that Iran needed to “get moving” or there “won’t be anything left.”
Inflation concerns cloud outlook for rate cuts
Markets also continued adjusting expectations for Federal Reserve policy following stronger-than-expected inflation data released last week.
According to CME Group’s FedWatch tool, traders are now pricing in more than a 40% probability that the Federal Reserve could raise interest rates in January.
Investors are now closely watching Wednesday’s release of Federal Reserve meeting minutes, along with the leadership transition at the central bank as former Governor Kevin Warsh prepares to assume the role of Fed chair.
Analysts said Warsh may quickly face pressure balancing White House demands for lower rates against increasingly hawkish inflation concerns among policymakers.
Nvidia and Walmart earnings in focus
Corporate earnings are expected to play a major role in shaping market sentiment this week, particularly results from Nvidia and Walmart.
Nvidia, currently the world’s most valuable company, is scheduled to report earnings Wednesday following a sharp rally in its shares and continued investor enthusiasm surrounding artificial intelligence infrastructure spending.
The Philadelphia Semiconductor Index has surged more than 60% this year as demand for AI-related chips accelerated.
Walmart’s upcoming earnings report is also expected to provide insight into US consumer spending trends as households face higher fuel prices and persistent inflation.
Among notable movers, Dominion Energy surged after NextEra Energy announced the acquisition of the utility company.
Meanwhile, shares of UnitedHealth Group declined 2% after Berkshire Hathaway disclosed sales of several smaller stock holdings, including the health insurer.
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