Oil Price Surge Presses US Stocks Near Record Highs
US stocks edged lower on Monday, but remain near their record highs. The S&P 500 fell 0.5% and the Dow Jones Industrial Average dropped 272 points, or 0.5%, while the Nasdaq composite slipped 0.3%. Oil prices accelerated upward, with Brent crude rising 2.7% to $90.87 per barrel.
The surge in oil prices sent Treasury yields higher, which may pressure the economy and drive up inflation. The yield on the 10-year Treasury climbed to 4.72% from 4.68% late Friday. This increase is partly due to rising concerns about inflation and the potential for interest rate hikes by the Federal Reserve.
Despite high inflation, US companies have seen profits boom, with those in the S&P 500 index on track to deliver growth of roughly 50% for earnings per share in the spring from a year earlier. However, big retailers such as Home Depot, Target, and Walmart are facing pressure from rising costs and potentially weaker customer incomes.