US Stocks Fall Amid Spiking Bond Yields and Higher Oil Prices

US stocks fell on Monday as bond yields spiked and oil prices rose due to concerns over the Strait of Hormuz. The yield on the 30-year US Treasury bond reached its highest level since June 2007 at 5.31%, while oil prices jumped more than 2%.

Analysts attribute the rise in Treasury yields to persistent inflation and expectations that a flood of US bonds will keep deficits high, discouraging equity purchases. David Morrison, an analyst at Trade Nation, said 'The ongoing diplomatic gridlock between Washington and Tehran over transit through the Strait of Hormuz has kept crude prices elevated.'

Despite a potential US-Iran ceasefire set to expire on Monday, President Donald Trump threatened to bomb Oman if it got in the way of a deal. Briefing.com analyst Patrick O'Hare noted that 'When you get a move like that in oil and interest rates, it just kind of tends to serve as a headwind.'

The S&P 500 fell 0.5% as all three major US indices finished lower. The European Central Bank's paper warned of spillover effects from an artificial intelligence bubble on European markets.