U.S. stocks experienced a decline on Monday as rising oil prices and higher Treasury yields heightened concerns over inflation and borrowing costs. The S&P 500 fell by 0.6%, the Dow Jones Industrial Average decreased by 0.4%, and the Nasdaq Composite dropped 0.6%. The market downturn occurred in the wake of Brent crude oil prices briefly surpassing $100 per barrel before settling around $97.61.
The volatility in oil prices is attributed to uncertainties surrounding the flow of tankers through the Strait of Hormuz amid ongoing conflict involving Iran. This rise in energy prices has fueled inflation worries, with U.S. gasoline prices seeing significant increases over the past year.
Concerns about inflation have also contributed to the rise in Treasury yields. The 10-year Treasury yield climbed to 5.24% from 5.17%, and the 30-year yield increased to 5.56%. Higher borrowing costs can exert pressure on both businesses and consumers and can make stocks and other investments less attractive.
In the stock market, airline shares were notably impacted as investors considered the implications of increased fuel costs. Both American Airlines and United Airlines recorded losses as a result. Additionally, stocks related to gold weakened as gold prices fell sharply during the session.