US stock indexes fell on Monday as surging oil prices pushed investors to reprice inflation expectations and lift government bond yields. The S&P 500 dropped 0.92%, the Dow Jones Industrial Average lost 0.75%, and the Nasdaq 100 slid 1.55%, while December E-mini S&P 500 futures and December E-mini Nasdaq-100 futures also retreated.
Key takeaways
- Price move: The S&P 500 fell 0.92%, with the Nasdaq 100 down 1.55%.
- Catalyst: Crude oil rose more than 2%, boosting inflation expectations and lifting bond yields.
- Market implication: Higher yields weighed hardest on rate-sensitive growth segments, pressuring chipmakers and AI-related stocks.
- Offsetting factor: The US and China outlined tariff cuts on about $30 billion of imports from each side, supporting parts of the equity market.
What drove the move
Stocks came under pressure as crude oil prices jumped more than 2%, reviving concerns about inflation. The increase followed reports that hopes for a near-term breakthrough to end the Iran war and reopen the Strait of Hormuz faded after President Trump rejected Iran’s latest proposals. Iran signaled it would not ease its demands to reopen the strait, and additional geopolitical risk emerged after Iran-backed Houthi militants in Yemen launched drone and missile attacks against Saudi Arabia.
As oil climbed, yields rose across major markets. Data in the market commentary showed the US 10-year Treasury yield reaching a 19-year high around 5.27% and the 10-year German Bund yield rising to a 17-year high near 3.65%. Investors also appeared to look through any near-term risk premium in oil to the broader macro implication: higher energy prices can feed inflation expectations, which can pressure longer-dated discount rates used to value equities—particularly growth stocks.
Market reaction
The selloff was concentrated in technology and economically sensitive subgroups. The jump in yields weighed on chipmakers and AI-focused names, dragging down semiconductor and related equity exposure. The iShares Semiconductor ETF fell more than 3%, while several large-cap chip and AI-adjacent companies moved lower, including ARM (down more than 8%), Intel and Qualcomm (each down more than 6%), and a broad set of other semiconductor-related stocks that were down in the mid-single digits to low double digits.
Miners also declined as precious metals weakened; the report noted that gold and silver slid to 1.75-month lows, with multiple mining stocks falling more than 4% to 6%. Meanwhile, software stocks were another notable source of weakness, pulling on both the Nasdaq and Dow through broad declines across major enterprise software providers.
What helped limit losses
Despite the pressure from rates and oil, there were pockets of support. The US and China detailed a plan to cut tariffs on roughly $30 billion of imports from each country. According to China’s Commerce Ministry, reductions would take effect once both sides complete domestic legal procedures required to implement the changes.
Separately, the report cited US economic data as a supportive factor. The September Dallas Fed manufacturing survey fell 1.8 points to 9.8, which was described as a smaller decline than expectations for a 7.8 reading. That helped cushion broader risk appetite even as the bond market turned tighter.
In rates markets, the commentary said investors were pricing a high probability of further central-bank tightening, with markets discounting a 68% chance of a 25 basis point Fed hike at the next FOMC meeting on October 27–28. In Europe, it also reported pricing for an ECB move, with a 37% chance of a 25 basis point hike at the ECB meeting on October 29.
Company moves and notable stories
Stock-specific news added to the day’s rotation within the indexes. Bloom Energy fell more than 9% after Oracle sent a New Mexico data center developer a notice citing force majeure, which aimed to delay payments if the project is derailed. Roblox dropped more than 7% after Jefferies downgraded the shares to underperform from hold. Boeing slid more than 4% following a complaint alleging the company violated multiple federal laws in retaliation against a federal contract compliance expert who raised aircraft safety and worker health issues.
In the capital markets, Snowflake declined more than 2% after announcing it intends to offer $3.5 billion of convertible senior notes due in 2029 and 2031.
Not all moves were negative. Kodiak Sciences surged more than 142% after reporting Phase 3 results for Zenkuda and tabirafusp-ted met key endpoints in patients with wet age-related macular degeneration. NetEase ADRs gained more than 5% after Morgan Stanley named the stock a top pick, and Nvidia rose more than 2% after boosting its share buyback program by $150 billion.
Bigger picture for investors
The day’s trading underscored how quickly equity sentiment can shift when energy prices move higher and bond yields follow. With the market repricing the inflation outlook through crude-linked risk, investors leaned away from high-duration equities such as semiconductors, AI beneficiaries, and parts of enterprise software. At the same time, tariff-cut headlines and select economic data helped prevent the decline from becoming broader across all sectors.
Looking ahead, traders will likely watch for additional confirmation on inflation pressures from energy, continued movement in Treasury yields, and further guidance on monetary policy expectations as central bank decisions approach. The report also listed several earnings scheduled for September 28, 2026, including IDT Corp, Jefferies Financial Group, and Vail Resorts.
