United States benchmark indexes finished mixed on Monday night (Tuesday AEST), as investors weighed rising oil prices and a spike in Treasury yields while monitoring developments surrounding the conflict in the Middle East.
The Dow Jones Industrial Average rose 156.0 points, or 0.3%, to 49,686.1, the S&P 500 slipped 5.5 points, or 0.1%, to 7,403.1, and the Nasdaq Composite fell 134.4 points, or 0.5%, to 26,090.7.
Investor sentiment remained cautious as oil prices climbed amid concerns that escalating tensions in the Middle East could further disrupt global energy supplies through the Strait of Hormuz.
The benchmark 10-year Treasury yield climbed to its highest level since February 2025 at 4.631% earlier in the session, reflecting concerns that elevated energy prices could keep inflation higher for longer and delay interest rate cuts.
U.S. crude oil prices also settled higher amid a volatile trading session. West Texas Intermediate futures rose 3.3% to close at US$104.38 per barrel, while Brent crude gained 2.6% to settle at US$112.10 a barrel.
However, oil prices pared gains after U.S. President Donald Trump said he had paused a planned attack on Iran to allow negotiations aimed at ending the U.S.-Israeli conflict with Tehran.
Trump said Iran had sent a new peace proposal to Washington and added that the United States was prepared to resume military action if negotiations failed.
In a Truth Social post, Trump said the decision to delay military action followed requests from Qatar, Saudi Arabia and the United Arab Emirates, whose leaders indicated that “serious negotiations are now taking place” that could lead to a deal that is “very acceptable” to the US.
Meanwhile, Nvidia results remained a major focus for investors ahead of the chipmaker’s earnings report due later this week. Shares in the AI chip giant fell 1.3%, making it the largest drag on the S&P 500 during the session.
Expectations remain elevated for Nvidia after the company’s shares rebounded sharply from March lows, while the Philadelphia Semiconductor Index has surged this year amid continued strong demand for artificial intelligence-related chips.
Retail giant Walmart is also scheduled to report earnings this week, with investors closely watching for signs of how U.S. consumers are coping with elevated fuel prices and broader inflation pressures. Walmart shares rose 1.4%.
Among individual stocks, Dominion Energy surged 9.4% after power company NextEra Energy announced it would acquire the utility in an all-stock transaction valued at about US$66.8 billion. Shares of NextEra Energy fell 4.6%.
Regeneron Pharmaceuticals dropped 9.8% after the drugmaker said its experimental treatment failed to meet the primary goal in a late-stage trial involving patients with advanced melanoma, a form of skin cancer.
Markets also continued to assess the outlook for U.S. monetary policy following last week’s stronger-than-expected inflation data.
According to the CME Group FedWatch Tool, traders are pricing in a 39.8% probability that the U.S. Federal Reserve will raise interest rates by 25 basis points before the end of the year.
On the bond markets, the 10-year Treasury yield settled down 0.3% at 4.585%, while the 2-year Treasury yield fell 0.8% to 4.046%.
