Wall Street closed lower on Monday, driven down by a sharp rise in US government bond yields. Stock markets received little support from oil prices, which fell significantly in late trading hours from earlier highs following media reports that President Donald Trump is open to easing sanctions on Iran regarding its nuclear programme.
Government bond yields rose further after strong gains last week. The yield on the ten-year US Treasury note topped 5.2 per cent, reaching its highest level in years. Investors fear rising inflation and are demanding higher yields to compensate if price growth remains persistent. This environment is particularly unfavourable for major technology companies that require substantial capital to fund heavy investments in data centres and artificial intelligence infrastructure.
The Dow Jones Industrial Average fell 0.7 per cent to 51,481.51 points. The S&P 500 fell 0.8 per cent to 7,683.69 points, while the tech-heavy Nasdaq dropped 0.9 per cent to 26,820.38 points. Markets had recorded gains on Friday.
An investment expert at asset management firm Gabelli Funds noted that bond yields rose sharply again on Monday, creating understandable weakness across stock markets. The expert added that competition for capital, driven by heavy spending from major AI companies, is also pressuring consumers through higher interest rates.
Technology stocks including Qualcomm, Intel, and Meta fell by up to 7.1 per cent. Nvidia bucked the trend, rising 1.7 per cent after the leading seller of AI chips launched a software platform designed to prevent AI agents from misbehaving. According to the company, the software could have prevented a previous OpenAI hack at Hugging Face. Nvidia also announced plans to expand its share buyback program.
Tesla fell 3.9 per cent after investment bank JPMorgan lowered its price target for the electric vehicle manufacturer, citing expectations of disappointing third-quarter deliveries.
@anp | NEWS BRAINPORT
