US stocks fall as Treasury yields hit highest level since 2007

US stocks fell on Monday as rising Treasury yields pushed major indexes further away from their recent record highs, while uncertainty over oil supplies amid the war with Iran continued to weigh on financial markets.

The S&P 500 fell 0.8% to 7,683.69, while the Dow Jones Industrial Average dropped 347.11 points, or 0.7%, to 51,481.51.

The Nasdaq composite also declined, falling 248.34 points, or 0.9%, to 26,820.38.

The Russell 2000 index, which tracks smaller US companies, dropped 19.64 points, or 0.7%, to 2,817.91.

The declines came as yields in the US bond market climbed to their highest levels in roughly two decades.

The yield on the benchmark 10-year US Treasury note rose to 5.23%, reaching its highest level since 2007.

Higher bond yields can put pressure on stock valuations because they can make bonds more attractive to investors while increasing borrowing costs for companies and consumers.

According to The Associated Press, the latest movement in oil prices contributed to the rise in Treasury yields. Investors remain uncertain about when oil tankers will again be able to move freely through the Strait of Hormuz amid the ongoing war with Iran.

The Strait of Hormuz is a critical route for global energy supplies, and prolonged disruption could keep pressure on oil prices and increase concerns about inflation.

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The rise in Treasury yields more than offset gains by Nvidia, which had announced a major stock buyback.

Despite Monday’s decline, the major US indexes remain higher for the year.

The S&P 500 is up 838.19 points, or 12.2%, so far this year.

The Dow Jones Industrial Average has gained 3,418.22 points, or 7.1%, while the Nasdaq is up 3,578.39 points, or 15.4%.

The Russell 2000 has gained 336.01 points, or 13.5%, over the same period.

The latest market movements come as investors continue to monitor developments in the Iran war and their potential impact on global energy supplies.

Any prolonged disruption to oil shipments through the Strait of Hormuz could have wider consequences for energy prices and financial markets, while renewed stability in the shipping route could ease some of those concerns.

For now, investors are balancing strong gains recorded by US stocks earlier in the year against renewed pressure from rising bond yields and uncertainty surrounding energy markets.

(APNews)