U.S. stocks opened lower Monday as another surge in oil prices and Treasury yields revived fears that inflation could stay elevated and force the Federal Reserve to keep tightening policy.
At the open, the Dow Jones Industrial Average fell about 0.4%, the S&P 500 dropped around 0.5%, while the Nasdaq Composite slid roughly 1%, with technology stocks once again taking the biggest hit from higher borrowing costs.
The selloff came as Brent crude climbed to around $108 a barrel, while the benchmark 10-year Treasury yield moved near 5.23%. That combination has become one of Wall Street’s most important pressure points this month: higher oil raises inflation risk, while higher yields make expensive equities less attractive.
Oil Returns as Wall Street’s Biggest Inflation Risk
Oil prices jumped after President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz and resuming negotiations.
Brent gained roughly 4% in early trading, while WTI moved toward $98 a barrel as traders again priced in the risk of disruption to global energy flows.
The move reverses some of last week’s relief, when falling crude prices helped stocks recover. Coinpaper previously highlighted how stocks rebounded as oil fell below $103, reducing pressure on inflation expectations and bond yields.
Monday’s reversal shows how quickly that relationship can turn.
Nasdaq Takes the Biggest Hit as Yields Rise
Technology stocks are particularly sensitive to higher yields because more of their valuation depends on expected future earnings.
That dynamic has already hurt the Nasdaq several times this month, including when hot producer inflation and $100 oil pushed the major indexes lower.
The 10-year Treasury yield near 5.2% is therefore adding another layer of pressure.
Markets are also increasing bets on another Fed hike in October, with probabilities moving toward 70% after hawkish central-bank commentary and renewed energy inflation concerns.
The Fed already raised rates earlier this month, making another increase especially important for equity valuations.
