US Stocks Slip from Record Highs Amid Oil Price Surge
US stocks struggled to regain their record highs on Monday as rising oil prices fueled inflation concerns and market volatility. The S&P 500 fell 0.5% and remains near its all-time high set Thursday, while the Dow Jones Industrial Average dropped 272 points or 0.5%, and the Nasdaq composite slipped 0.3%. Wall Street's losses intensified in the afternoon after oil prices surged by 2.7% to $90.87 per barrel of Brent crude.
The price instability stems from uncertainty over the Iran-US conflict's impact on global crude supplies, with Brent experiencing a wild swing between $72 and $102 last month as hopes for a deal to allow tanker passage fluctuated. The recent oil price hike has pushed Treasury yields higher in the bond market, increasing pressure on the economy and asset prices.
The yield on the 10-year Treasury climbed to 4.72% from 4.68% late Friday, up from 3.97% before the Iran conflict largely due to higher oil prices exacerbating inflation and raising the likelihood of interest rate hikes by the Federal Reserve. Higher rates may curb inflation but do so by slowing economic growth.