Iran Tensions Lift Oil and Yields as Wall Street Retreats

U.S. stocks fell Monday as renewed tensions between Washington and Tehran sent oil prices higher and Treasury yields climbing. In late-morning trading, the Dow was down about 0.7%, the S&P 500 lost roughly 0.8%, and the Nasdaq Composite fell about 1%.

President Donald Trump rejected an Iranian proposal for a seven-day truce, which Iran had presented through Qatari mediators. Trump said negotiations were expected to continue this week. The Wall Street Journal separately reported that he expects renewed strikes against Iran after the November midterm elections.

Crude prices rose roughly 3% during Monday trading, reviving concerns that energy inflation could keep the Federal Reserve restrictive. The 10-year Treasury yield climbed to around 5.27%, while the 30-year yield approached 5.57%.

Markets were also weighing the possibility of another Fed rate increase in October. Traders were pricing in roughly a 70% chance of a quarter-point increase, according to CME data cited by Reuters.

Some stocks moved against the broader market. Nvidia gained more than 2% after announcing a $150 billion increase to its share-repurchase authorization, while Arm Holdings dropped more than 8%.

Investors are watching oil prices, Treasury yields and progress in U.S.-Iran negotiations. The article identified sustained energy costs, inflation and interest rates as key risks for equities.