U.S. equities opened mostly lower on Monday as investors balanced renewed optimism in artificial intelligence against rising long-term Treasury yields, firmer oil prices, and lingering Middle East tensions.
The Dow Jones Industrial Average fell about 167 to 174 points, or 0.3%, while the S&P 500 slipped 0.1% and the Nasdaq Composite traded nearly flat. The S&P 500 had closed at a record 7,798.99 last week after softer inflation data and a surprise decline in July retail sales reduced expectations for a September Federal Reserve rate increase.
The bond market added fresh pressure: the 30-year U.S. Treasury yield climbed to roughly 5.29%, its highest level since 2007, while the 10-year yield traded near 4.7%. Higher long-term borrowing costs give investors a more attractive alternative to equities and can raise financing costs, making the path higher for stocks more demanding.
Technology shares helped limit broader losses. Reports that Anthropic is preparing for an initial public offering and expects revenue of about $190 billion to $200 billion in 2028, with second-quarter revenue exceeding $11.5 billion, supported AI-related names. Micron Technology rose more than 4%, Sandisk posted strong early gains, and Nvidia edged higher ahead of its results next week. Nvidia also drew attention after a report that it had scaled back plans to support a proposed OpenAI data center project in Ohio.
Rate expectations remained a key driver. CME FedWatch data showed traders pricing in roughly a 31% probability of a 25-basis-point hike in September, down from near-even odds a week earlier. Fed Chair Kevin Warsh has not provided forward guidance, and the Federal Reserve is scheduled to release its latest meeting minutes on Wednesday. Earnings season is near its end, with 453 S&P 500 companies having reported and about 84.8% beating analysts' earnings estimates, according to LSEG IBES data.
Oil prices climbed after an Iranian official warned that tensions in the Strait of Hormuz and the wider region could escalate if diplomacy with the U.S. fails. West Texas Intermediate futures rose nearly 1% to about $83 a barrel, and Brent crude gained about 1% to roughly $89 a barrel, keeping inflation risks in focus.
Technical analysts also flagged key levels, with the S&P 500 still above short-, medium- and longer-term moving averages, while Dow Jones support was identified near 53,536 to 53,156. For risk assets, the combination of historically high long-term yields, elevated oil prices, softer Fed hike expectations, and still-resilient tech demand creates a mixed macro backdrop.
