Dow declines as Treasury yields rise

The Dow Jones Industrial Average declined on Monday, giving back some of last week's strong gains as Treasury yields rose and investors anticipated upcoming earnings reports.

The S&P 500 dipped 0.18 per cent to close at 5,853.98. The 30-stock Dow fell 344.31 points, or 0.8 per cent, finishing at 42,931.60, ending a three-day winning streak. Meanwhile, the Nasdaq Composite was an exception, rising 0.27 per cent to 18,540.01.

Among the S&P 500 sectors, only Technology ended the day in positive territory, gaining 0.93 per cent. In contrast, Real Estate fared the worst, dropping 2.08 per cent.

Consumer and homebuilder stocks were among the biggest losers as concerns about persistently high interest rates grew, with Target down 3.8 per cent and Builders FirstSource declining by 5.2 per cent. Lennar also lost 4.4 per cent.

The yield on the 10-year Treasury surged nearly 12 basis points to 4.19 per cent.

Earnings reports will be crucial this week, with about one-fifth of the S&P 500 expected to report. Notable companies on deck include Tesla, Coca-Cola, and GE Aerospace.

In corporate news, Boeing shares rose over 3 per cent after the aircraft manufacturer reached a new contract proposal with its machinists' union, potentially ending a strike that has lasted more than a month. A ratification vote is scheduled for Wednesday.

Warby Parker's stock jumped nearly 10 per cent after Goldman Sachs upgraded it from neutral to buy, citing the company's margin growth potential and strong fundamentals that support its "somewhat elevated" valuation.

Cigna’s stock fell more than 4.7 per cent following a Bloomberg report that the insurer has revived merger discussions with Humana, according to sources familiar with the matter.

In commodities news, gold prices reached all-time highs on Monday as the conflict between Israel and Hamas escalated, raising fears of further regional disruptions and driving investors toward this safe-haven asset.

Futures

The SPI futures are pointing to a 0.8 per cent fall.

Currency

One Australian dollar at 7.40am was buying 66.58 US cents.

Commodities

Gold added 0.16 per cent. Silver gained 2.35 per cent. Copper lost 0.52 per cent. Oil jumped 1.63 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.48 per cent, Frankfurt lost 1.00 per cent, and Paris dropped 1.01 per cent.

Turning to Asian markets, Tokyo’s Nikkei fell 0.07 per cent , while Hong Kong’s Hang Seng dropped 1.57 per cent and China’s Shanghai Composite added 0.20 per cent.

Yesterday, the Australian share market closed 0.74 per cent higher at 8344.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.

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