Wall Street mixed as bond yields and oil prices retreat

US stocks traded mixed in volatile trading on Monday, despite signs of easing pressure in the bond market selloff that weighed on equities last week, alongside a decline in oil prices.

The yield on the benchmark 10-year US Treasury note fell to 4.573%, after rising earlier in the session to 4.631%, its highest level since February 2025.

Oil prices also declined, with Brent crude falling about 2% following reports that the United States proposed a temporary waiver on sanctions targeting Iranian oil, easing some concerns over supply disruptions. Iranian officials did not immediately comment on the reports.

Robert Pavlik, senior portfolio manager at Dakota Wealth, said: “Yields are the key driver behind all of this, because growth stocks — especially AI-related companies — are valued based on future earnings. When yields rise, the present value of those stocks declines. That’s the market’s main issue right now.”

The recent bond market selloff was driven by rising oil prices, which fueled concerns that inflation could keep borrowing costs elevated, at a time when efforts to end the Iran war appeared stalled.

By 10:02 a.m. Eastern Time, the Dow Jones Industrial Average rose 139.25 points, or 0.28%, to 49,665.42, while the S&P 500 gained 3.27 points, or 0.04%, to 7,411.61. Meanwhile, the Nasdaq Composite fell 35.93 points, or 0.14%, to 26,189.22.

Consumer discretionary and financial stocks led gains on the S&P 500, while technology and energy shares were among the weakest performers.

Wall Street had posted strong gains in recent weeks, with both the S&P 500 and Nasdaq reaching record highs on AI-driven optimism, prompting investors to largely overlook inflation risks tied to higher oil prices.

Traders are now pricing in more than a 38.8% chance that the US Federal Reserve could raise interest rates in January, according to CME Group’s FedWatch Tool, following stronger-than-expected inflation data released last week.

Nvidia, currently the world’s most valuable company by market capitalization, is set to report earnings on Wednesday.

Expectations surrounding the company have risen sharply after its stock surged 36% from its March low, while the Philadelphia Semiconductor Index has climbed more than 60% this year on strong demand for AI-related chips.

Walmart, the world’s largest retailer, is also scheduled to report earnings this week, potentially offering a clearer picture of how US consumers are coping with higher energy prices and broader inflationary pressures.

Among individual stock moves, Dominion Energy jumped 10.5% after NextEra Energy announced it would acquire the smaller utility company in an all-stock deal valued at approximately $66.8 billion, while NextEra Energy shares fell 4.2%.

Regeneron shares also dropped 11.5% after its experimental treatment failed to meet the primary goal in a late-stage trial involving patients with advanced melanoma, a type of skin cancer.

Advancing stocks outnumbered decliners by a 2.12-to-1 ratio on the New York Stock Exchange, and by 1.26-to-1 on the Nasdaq.

The S&P 500 recorded 13 new 52-week highs and 11 new lows, while the Nasdaq posted 42 new highs and 95 new lows.