U.S. stock indexes were mixed in choppy trading on Monday even though the bond-market selloff that had pressured equities last week showed signs of cooling and oil prices pulled back.
The 10-year Treasury yield, the benchmark for global borrowing costs, fell to 4.573%, having climbed as much as 4.631% to its highest level since February 2025 earlier in the session.
Oil prices also moved lower, with Brent crude down nearly 2%, after reports said the U.S. had proposed a temporary waiver on Iranian oil sanctions, easing some concerns about supply disruptions. Iranian officials did not immediately comment.
"Yields are key to all of this because growth stocks, especially AI-related companies, are priced on forward-looking earnings. When yields move higher, their current valuations come down. That's really the key issue for the market," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
The recentbond-market selloff was fueled by a surge in oil prices, which has stoked concerns of inflation potentially keeping borrowing costs elevated as efforts to end the Iran war appeared to stall.
At 10:02 a.m. ET, the Dow Jones Industrial Average rose 139.25 points, or 0.28%, to 49,665.42, the S&P 500 gained 3.27 points, or 0.04%, to 7,411.61 and the Nasdaq Composite lost 35.93 points, or 0.14%, to 26,189.22.
Consumer services and the financial sector led gains on the S&P 500, while information technology and energy were among the weakest performers.
Wall Street had rallied sharply in recent weeks, with the benchmark S&P 500 and the tech-heavy Nasdaq reaching record highs as enthusiasm around artificial intelligence helped investors look past the inflationary threat from soaring oil prices.
Traders are now pricing in a more than 38.8% chance the U.S. Federal Reserve will raise interest rates in January, according to CME's FedWatch tool, after last week's hotter-than-expected inflation readings.
The world's most valuable company, Nvidia, is scheduled to report results on Wednesday.
Expectations are high for the company, whose shares have risen 36% from a March low, while the Philadelphia SE Semiconductor Index has surged more than 60% this year on strong demand for AI-related chips.
Walmart, the largest retailer in the world, is also expected to report earnings this week, which could offer a clearer picture of how U.S. consumers are coping with higher energy prices and broader inflation pressures.
In other movers on the day, Dominion Energy jumped 10.5% after power firm NextEra Energy said it would buy the smaller utility in an all-stock deal valued at about $66.8 billion. NextEra shares fell 4.2%.
Shares of Regeneron fell 11.5% after the drugmaker's experimental treatment missed the main goal in a late-stage trial in patients with advanced melanoma, a type of skin cancer.
Advancing issues outnumbered decliners by a 2.12-to-1 ratio on the NYSE, and by a 1.26-to-1 ratio on the Nasdaq.
The S&P 500 posted 13 new 52-week highs and 11 new lows, while the Nasdaq Composite recorded 42 new highs and 95 new lows.
