The technology-heavy Nasdaq closed lower on Monday as investors booked profits while Treasury yields rose and higher oil prices fueled concerns that inflation and borrowing costs could remain elevated.

The 10-year Treasury yield, a measure of global borrowing costs, climbed early in the session to its highest level since February 2025 as continued concerns over oil supply disruptions raised concerns that higher inflation would push up borrowing costs. US crude settled over 3% after a volatile session. Oil rose after the settlement when US President Donald Trump posted on social media that he was halting a planned military strike on Iran scheduled for Tuesday, while efforts to reach a deal continued. But he added that the United States was prepared to resume attacks in the absence of a deal.

“It seems that one issue that is moving the markets day-to-day is oil prices. The main variable is the blockade on the Strait of Hormuz which pushes oil higher and increases the long-term risk of inflation expectations being unanchored. That raises Treasury yields,” said Burns McPhillus Group’s managing director McPhillus in, Burns McPhillus Group. was Adding that high yields are “especially bad for long-term stocks, like the tech sector and a lot of high-flying chip stocks.”

Rally break

The Nasdaq posted its second straight decline as investors took a break from a rally that began in late March. The S&P closed Thursday’s session down more than 18% from its March 30 close, near its lowest since the Iran war began in late February. In the same time frame, the Nasdaq rose 28% as excitement about artificial intelligence and solid technology earnings helped investors look past inflationary risks.

“There’s concern about the rally we’ve had in the short term and some profit taking,” said Tim Gresky, senior portfolio strategist at Ingalls & Snyder in New York.

According to preliminary data, the S&P 500 fell 4.90 points, or 0.07%, to close at 7,403.60, while the Nasdaq Composite lost 135.79 points, or 0.52%, to 26,089.35. The Dow Jones Industrial Average rose 159.52 points, or 0.33%, to 49,688.25.

The heavyweight information technology sector led the decline with chip stocks the biggest drag among the S&P 500’s 11 major industry sectors. The energy sector was the biggest gainer during the session.

After last week’s expected inflation readings, traders are pricing in a 37.8% chance that the US Federal Reserve will raise interest rates by 25 basis points by the end of the year, according to CME’s FedWatch tool.

Results in NVIDIA Focus

The world’s most valuable company, Nvidia, is due to report results on Wednesday.

Expectations are high for the company, whose shares have risen sharply from March lows, while the Philadelphia SE Semiconductor Index has risen this year on strong demand for AI-related chips.

Walmart, the world’s largest retailer, is also expected to report earnings this week, which could provide a clearer picture of how US consumers are coping with higher energy prices and broader inflation.

Dominion Energy shares jumped after power firm NextEra Energy said it would buy the utility in an all-stock deal valued at about $66.8 billion. Shares of Next Era fell. Shares of Regeneron tumbled after the drugmaker’s experimental treatment missed a key goal in a late-stage trial in patients with advanced melanoma, a type of skin cancer.