U.S. stocks closed lower on Monday to start a busy week, as renewed tensions between the United States and Iran pushed oil prices higher and long-term Treasury yields climbed to multi-decade highs. President Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz revived worries about energy-driven inflation, which in turn fueled bets on further interest rate hikes from the Federal Reserve. Higher bond yields make borrowing more expensive and can make stocks look less attractive by comparison, which weighed on the market.
What Moved Markets
The Dow Jones Industrial Average fell 347.11 points, or 0.67%, to close at 51,481.51. The S&P 500 slid 59.72 points, or 0.77%, to finish at 7,683.69. The Nasdaq Composite dropped 248.34 points, or 0.92%, to end at 26,820.38.
The 10-year Treasury yield, a benchmark for mortgages and other loans, rose to about 5.24%, its highest level since 2007. The 30-year yield climbed to roughly 5.56%, the highest since 2004. Oil was volatile, with Brent crude trading around the $100 mark after swinging in both directions during the session. Gold and silver also fell sharply as rising yields reduced the appeal of assets that pay no interest.
Federal Reserve Governor Lisa Cook added to the cautious tone, saying that AI-related investment and higher oil prices should keep pressure on inflation in the coming months. She noted that any further rate increases will depend on incoming data. Bank stocks were also under pressure amid worries that AI tools could make it easier for customers to move cash to higher-yielding accounts. The S&P 500 is now roughly flat for September, though it remains up more than 12% for the year.
Notable Movers
Nvidia (NVDA) gained 1.68% to close at $228.86, bucking a weak day for chip stocks. The company authorized an additional $150 billion in share buybacks and launched a new platform designed to help developers put safety guardrails on AI agents.
MongoDB (MDB) plunged about 20% after Meta Platforms poached its CEO, Chirantan “CJ” Desai, to lead Meta’s new enterprise AI platform. Meta (META) itself fell about 4% as investors took profits after a nearly 13% gain last week.
Kodiak Sciences (KOD) more than doubled in early trading after reporting promising phase 3 trial results for its experimental treatment for age-related macular degeneration.
Airline stocks slipped as higher oil prices raised concerns about jet fuel costs, with United (UAL) and American (AAL) down more than 2% in early trading. Gold miner Newmont (NEM) also fell on the slide in gold prices.
Looking Ahead
Investors face a data-heavy week. The Personal Consumption Expenditures report, the Fed’s preferred inflation gauge, is due Wednesday, and the September jobs report arrives Friday. Together they could shape expectations for the Fed’s next move. Earnings from Micron (MU) and Nike (NKE) are also on the calendar, and traders will keep watching headlines on U.S.-Iran talks, which President Trump says should resume this week. Bond yields and oil prices remain the key variables for stocks in the days ahead.