The S&P 500 slipped 0.1%, the Nasdaq fell 0.3%, and the Dow lost 61 points on Monday as investors weighed this year’s interest rate outlook amid growing skepticism that a lasting resolution to the conflict with Iran is close. A rally in oil prices drove bond yields higher on renewed concerns about energy-driven inflation. Rising energy costs stoked fears that the Federal Reserve may be forced to raise rates this year despite signs of a cooling labor market.
Credit-sensitive stocks were mixed, with most financials trading lower. Visa declined 0.3%, American Express 0.6%, and Morgan Stanley 0.5%. Chipmakers sold off sharply: Nvidia dropped 2.9% following reports that major Wall Street firms are working with the company on a $500 billion AI funding package, while Intel sank 4.1% as it moves ahead with plans for a $15 billion stock offering. Apple also fell 1.5% after Jefferies downgraded the shares to underperform. In contrast, hyperscale cloud providers mostly advanced after brokers highlighted robust demand for cloud services, with Microsoft up 1.2% and SpaceX gaining 4.2%.