US Stocks Plummet as Bond Market Yields Reach Two-Decade High
US stocks declined on Monday as oil prices rose and bond market yields climbed to their highest levels in roughly two decades. The S&P 500 dropped 0.8% after giving back much of its gain from last week, when it approached its all-time high.
The Dow Jones Industrial Average fell 347 points, or 0.7%, while the Nasdaq composite sank 0.9%. Treasury yields rose due to various factors, including worries about inflation and Washington's massive debt load. This increase in borrowing costs affects the economy by making loans more expensive for everyone.
The price of Brent crude briefly climbed above $101 per barrel on Monday morning but eventually settled at $97.83, up 0.4%. The rise in oil prices has contributed to higher inflation, with the average price for a gallon of regular gasoline reaching nearly $4.48 from $3.13 a year ago.
Stocks related to airlines and companies with high fuel bills declined due to the increase in oil prices. Gold miners also suffered as gold's price dropped 3.5%. The precious metal often helps protect investors from high inflation, but its value weakens when rising yields make bonds more attractive.