The S&P 500 index closed down 0.8%, erasing all of its gains for the month; the Nasdaq 100 index tumbled 1.1%, with tech stocks leading the decline. The yield on 10-year U.S. Treasury bonds rose by 7 basis points to 5.23%, hitting a nearly twenty-year high; gold plummeted by 3.9% to $4,118.66 per ounce. Brent crude oil remained around $105 per barrel on Monday, while WTI crude oil rose by 0.5% to $92.91 per barrel.

The stalemate in the US-Iran situation continues to intensify, putting pressure on global markets. Oil prices are fluctuating wildly, and yields on US Treasury bonds have soared to nearly twenty-year highs, both suppressing risky assets.

U.S. stocks fell across the board on Monday. The S&P 500 index closed down 0.8%, erasing all of its gains for the month; the Nasdaq 100 index tumbled 1.1%, with tech stocks leading the decline. The yield on 10-year U.S. Treasury bonds rose by 7 basis points to 5.23%, hitting a nearly twenty-year high.

Tech giants as a whole are seeing declines: (ranked by market value) Apple down 0.78%, Google-A down 0.34%, Microsoft down 1.35%, Amazon down 1.41%, TSMC up 0.5%, SpaceX down 2.16%, Meta Platforms down 4.79%, Broadcom down 0.92%, Tesla down 3.94%.

NVIDIA rises 1.68%, the company announces an additional $150 billion in repurchase authorization, which is the largest repurchase in its history; this brings the total amount of its repurchase program to $235 billion. NVIDIA has also released two open-source tools for controlling out-of-control AI intelligents.

The Philadelphia Semiconductor Index fell by 1.61%. Among the 30 constituent stocks, 9 rose and 21 fell. Arm Holdings fell by 8.7%, Qualcomm fell by 7.17%, Intel fell by 5.67%, and American Supermicro Systems fell by 3.61%.

Most storage concept stocks declined; SK Hynix fell by 5.03%, Sandisk fell by 3.65%, Micron Technology fell by 2.61%, Western Digital fell by 0.78%, and Seagate Technology rose by 0.51%.

Optical communications as a whole weakened, with CRDO falling by 8.67%, Coherent falling by 4.52%, AAOI falling by 4.52%, Micron Technology falling by 3.83%, Corning falling by 3.29%, and Lumentum falling by 2.16%.

Investors took profits on Meta Platforms on Monday after a nearly 13% surge last week, with the stock closing down 4.79%. Previously, Meta had been rising for five consecutive weeks, with a cumulative increase of over 25% since September.

MongoDB tumbled by over 18%, and its CEO resigned less than a year into the position, to take on the role of head of platform business for the newly established Meta enterprise's AI platform.

The interest rate swap market has currently fully priced at least three 25-basis-point rate hikes over the next 12 months, with the possibility of a fourth hike as well. Gold tumbled significantly by 3.9% to $4,118.66 per ounce, becoming the asset with the most prominent decline on the day.

There are significant differences in positions between the United States and Iran regarding the reopening of the Strait of Hormuz and a new ceasefire agreement. Iran insists on its proposal, but it has been rejected by Trump. Trump has stated that he is willing to grant sanctions exemptions and unfreeze frozen assets after achieving "substantial progress" on the Iranian nuclear issue.

The situation in the Hormuz Strait dominates market narratives, and the "headline effect" of oil prices disrupts multiple assets.

Brent crude oil remained around $105 per barrel on Monday, while WTI crude oil rose 0.5% to $92.91 per barrel.

However, intraday fluctuations are far more indicative of the market's vulnerability than the closing price. Brent and WTI have been fluctuating wildly amidst multiple "sudden news events": the resumption of exports through Saudi Arabia's East-West pipelines has pushed down oil prices, rumors of explosions in Saudi cities have driven up oil prices, followed by reports of "Iran agreeing to suspend uranium enrichment" that once again lowered oil prices, only for news of "huge differences in negotiations between the US and Iran" to cause oil prices to rebound.

US media reports that US President Donald Trump is open to making concrete progress on nuclear issues in exchange for relaxing sanctions against Iran; Saudi media Al-Hadath ( Alhadath ) reports that Iran has agreed to suspend uranium enrichment in exchange for the US lifting sanctions.

During the midday session of U.S. stocks, following the successive release of the above news, international crude oil futures quickly gave back some of their intraday gains. Both U.S. crude and Brent crude saw short-term declines during the session and refreshed their daily lows. However, as of now, there is still a lack of official confirmation from the United States and Iran regarding Hassad's statement that Iran has agreed to suspend uranium enrichment, so it should not be regarded as an officially reached agreement.

It is worth noting that despite widespread speculation about the possibility of the United States banning diesel exports, today European diesel prices have fallen to parity with those in the United States, which largely dispels the likelihood of such a ban as currently implied by the market.

BMO Capital Markets Head of US Interest Rate Strategy Ian Lyngen states:

We expect this conflict to continue to trouble the market in the foreseeable future, and the global economy will continue to adapt to the reality of supply disruptions.

He added that this means energy prices are likely to rise rather than fall. Unless the Strait of Hormuz can maintain safe navigation in the long term, any pullback is unlikely to reach previous lows.

U.S. Treasury yields break through a key level, real interest rates hit a new high since the Lehman crisis

The selling of U.S. Treasuries deepened on Monday, with the yield curve moving up by 7 to 8 basis points across the board.

The yield on 10-year U.S. Treasury bonds rose to 5.23%, the yield on 10-year British government bonds rose to 5.42%, and the yield on German bonds of the same maturity increased by 4 basis points to 3.64%. The real yield on 10-year bonds, after adjusting for inflation, also rose, reaching its highest level since the 2008 financial crisis.

The interest rate swap market has fully absorbed the expectation of at least three quarterly rate hikes over the next 12 months, and there is a possibility of a fourth hike.

E* Trade's Chris Larkin represents:

Under the pressure of both low yields and high oil prices, the broader market has struggled to gain upward momentum. Given that the Federal Reserve is currently focusing on inflation within its mandate, unless there are significant surprises in this week's labor market data, interest rates and energy trends will dominate market sentiment.

Wellington Management Portfolio Manager Brij Khurana warns that the market may be ignoring a larger risk scenario – "If commodity prices remain high for a long time, it will begin to erode real incomes and trigger demand destruction."

This week, significant data will be released one after another: Economists expect that the data to be announced on Wednesday will show that the month-over-month increase in economic consumer spending in August was the largest of the year; the Friday non-farm payroll report is expected to show about 90,000 new jobs created in September, with the unemployment rate remaining at 4.1%.

Tech stocks and AI concept stocks led the decline

On Monday, all major U.S. stock indices fell, with the Nasdaq index leading the decline.

The number of stocks at new lows on the New York Stock Exchange has exceeded the number of stocks at new highs for 10 consecutive trading days.

Technology and AI related sectors performed the weakest on Monday. The concept combination of AI significantly underperformed the non-AI components of the S&P 500, and non-profit technology stocks also saw a noticeable decline.

Defensive sectors such as consumer necessities and healthcare relatively resisted the decline, while discretionary consumption, finance, and technology sectors led the losses.

NVIDIA announced an expansion of its stock repurchase program to a record $150 billion, which supported the relative performance of the "Big Seven Tech" companies for most of the day, but towards the end of trading, there was an acceleration in the selling of large-cap tech stocks.

Goldman Sachs' trading desk rated the overall activity of the day as "3 out of 10," with a clear tendency for institutional clients to sell. Bloomberg macro strategist Sebastian Boyd stated:

Assuming there is a certain lower limit to the equity risk premium, then further declines in bond prices will drag down stock prices until yields fall back, after which the stock market is expected to rebound.

Performance of Other Assets

The rise in U.S. Treasury yields pushed up the dollar, but not significantly; it only rebounded slightly to near the level of last Friday's high.

Gold prices plummeted to their lowest level in nearly two months, with a daily decline of nearly 4%.

Shengbao Bank's head of commodities strategy, Ole Hansen, pointed out that the weakness in gold prices "reflects the combined effects of soaring bond yields, a strengthening US dollar, and technical selling, and may be further exacerbated by Chinese investors taking profits before the Golden Week holiday."

MKS PAMP, the head of research and metal strategies, stated in an interview with Bloomberg TV that gold is facing an "extremely severe environment" in the short term – oil prices are approaching $110, real yields are rising, and market pricing anticipates nearly 100 basis points of interest rate hikes over the next year, with these three pressures combining.

Bitcoin came under pressure along with risk appetite sentiment, falling by 2.3% at one point during the day, but then rebounded significantly from $82,500.