US Stocks Drop After Oil Prices Climb and the Bond Market Cranks the Pressure to New Heights
Oil prices jumped and Treasury yields rose after Trump rejected Iran’s proposal, with the 10-year yield climbing to 5.27%, analysts said.
- On Monday, Wall Street opened lower after President Donald Trump rejected an Iranian proposal to end the conflict, sparking a spike in crude oil prices and reviving inflation worries.
- Over the weekend, Trump rejected an Iranian offer to reopen the Strait of Hormuz and resume nuclear talks, stating that "that deal would not be acceptable" despite interest in a potential agreement.
- Airline stocks fell as rising oil prices increased fuel costs, with American Airlines falling 3.5% and United Airlines losing 3.3%, while the Dow Jones Industrial Average fell 0.8% and the Nasdaq Composite dropped 1.2% by 11 a.m. Eastern time.
- Treasury yields surged significantly, with the 10-year Treasury jumping to 5.27% from 5.17% late Friday and the 30-year Treasury leaping to 5.57% from 5.49%, returning to 2024 levels.
- Worries about inflation persist, with the average price for a gallon of regular gasoline at nearly $4.48, while Brent crude remains well above the roughly $72 per barrel seen before February's United States and Israel attacks on Iran.
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At about 14:05 GMT, the Dow Jones was down 0.42%, the Nasdaq index was down 0.70%, and the expanded S&P 500 index was down 0.45%. "It looks like we're accumulating all the bad news that we can find, which puts pressure on stock prices," comments AFP Sam Stovall, analyst at the CFRA firm. Donald Trump rejected on Sunday a plan by Iran to reopen the Strait of Ormuz within seven days, adding that he expected a resumption of discussions with Tehran …
Rising oil prices as well as rising yields on US government bonds continue to strain the mood on Wall Street. Investors are waiting for some dates over the course of the trading week.
US stocks: US market drops as Trump’s rejection of Iran peace plan lifts oil prices
Following President Trump's dismissal of Iran's peace proposal, US market indexes experienced a downward trend, spurred by a notable surge in crude prices. This escalation raised inflation worries, consequently leading to an uptick in Treasury yields and impacting economic outlooks. Meanwhile, Nvidia's stock showed resilience, buoyed by an announcement of substantial share repurchases, albeit only slightly supporting broader market sentiments.
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