Crude Oil Surges Over +5%, S&P 500 Index Falls -0.06% on Inflation Fears

The S&P 500 Index SPY closed down -0.06% on Monday, as stocks settled lower due to soaring crude oil prices and inflation fears.

The Dow Jones Industrial Average DIA closed down -0.11%, while the Nasdaq 100 Index QQQ lost -0.34%. The broader market was under pressure from higher crude oil prices, which pushed the 10-year T-note yield up by +5 bp to 4.70%.

Cleveland Fed President Beth Hammack made hawkish comments on Monday, saying she is not seeing a problem with the job market and that inflation is not coming down on its own. She stated that 'now is the time' for action, as the current interest rate is not meaningfully restricting the economy, and we would probably need 'some number' of rate hikes to bring down inflation.

However, despite the losses in stock indices, strength in energy providers, software stocks, and cybersecurity companies limited the decline. Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 45% y/y increase in July sales, a sign of sustained demand for its AI hardware.