Stocks Settle Lower as Bond Yields Rise | U.S. Finance News
The S&P 500 Index ($SPX) (SPY) on Monday closed down by -0.43%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down by -0.77%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down by -0.31%. September E-mini S&P futures (ESU25) fell -0.37%, and September E-mini Nasdaq futures (NQU25) fell -0.26%. Stock indexes settled decrease on Monday and gave back some of final Friday’s sharp rally. Concerns about tariffs and their affect on inflation and company income weighed on stocks. Also, larger bond yields have been damaging for stocks, as the 10-year T-note yield rose +3 bp to 4.28%. Stock indexes recovered from their worst ranges on power in chip makers.
Join 200K+ Subscribers: Find out why the noon Barchart Brief e-newsletter is a must-read for hundreds each day. The markets have been optimistic about final Friday’s dovish feedback from Fed Chair Powell, who stated the draw back dangers to the labor market could “warrant adjusting our policy stance.” However, there are considerations about how a lot the Fed can decrease rates of interest, with fears that inflation will rise from still-elevated ranges as President Trump’s tariffs transfer by means of the financial system. Monday’s US financial news was blended for stocks. The July Chicago Fed national exercise index fell -0.37 to -0.19, weaker than expectations of -0.11. However, July new home gross sales unexpectedly fell -0.6% m/m to 652,000 from an upwardly revised 656,000 in June (initially reported 627,000), nonetheless stronger than expectations of 630,000.On the geopolitical entrance, diplomatic efforts to finish the struggle in Ukraine stay elusive, as the US tries to broker a peace deal between the 2 international locations. On Sunday, Russian Foreign Minister Lavrov stated there was no assembly deliberate between the leaders of Russia and Ukraine and that there “needs to be an agenda first” for a assembly to happen. “This agenda is not ready at all.” Regarding tariffs, President Trump final week widened metal and aluminum tariffs to incorporate more than 400 shopper gadgets that comprise the metals, such as bikes, auto components, furnishings elements, and tableware. The change went into impact final Monday and didn’t exclude items already in transit.
In different current tariff news, Mr. Trump on August 13 prolonged the tariff truce with China for one more 90 days till November. On August 6, Mr. Trump introduced that he’ll double tariffs on US imports from India to 50% from the present 25% tariff, resulting from India’s purchases of Russian oil. According to Bloomberg Economics, the average US tariff will rise to fifteen.2% if charges are applied as introduced, up from 13.3% earlier, and considerably larger than the two.3% in 2024 earlier than the tariffs have been introduced.The markets this week will give attention to any contemporary tariff news or developments on ending the Ukraine-Russian struggle. On Tuesday, July capital new orders nondefense ex-aircraft and components, a proxy for capital spending, are anticipated to climb +0.2% m/m. Also, the June S&P CoreLogic composite-20 home price index is anticipated to ease to +2.20% y/y from +2.79% y/y in May. Finally, on Tuesday, the Conference Board’s Aug shopper confidence index is anticipated to fall -0.8 to 96.4. After Wednesday’s close, Nvidia will release its quarterly earnings and steerage. On Thursday, Q2 GDP is anticipated to be revised upward by +0.1 to three.1% (q/q annualized). Also, weekly initial unemployment claims are anticipated to fall by -5,000 to 230,000. On Friday, July personal spending is anticipated to climb +0.3% m/m, and July personal income is anticipated to rise +0.4% m/m. Also, the July core PCE price index, the Fed’s most well-liked inflation gauge, is anticipated to climb +0.2% m/m and +2.9% y/y. In addition, the Aug MNI Chicago PMI is anticipated to fall -0.6 to 46.5. Finally, the University of Michigan’s final-Aug US shopper sentiment index is anticipated to be unrevised at 58.6.Federal funds futures costs are discounting the probabilities for a -25 bp fee cut at 83% on the subsequent FOMC assembly on September 16-17. The markets are discounting the probabilities at 50% for a second -25 bp fee cut on the following assembly on October 28-29.Earnings studies point out that S&P 500 earnings for Q2 are on monitor to rise +9.1% y/y, significantly better than the pre-season expectations of +2.8% y/y and probably the most in 4 years, in accordance with Bloomberg Intelligence. With Q2 earnings season winding down, over 94% of S&P 500 companies having reported Q2 earnings, about 82% of corporations exceeded revenue estimates. Overseas stock markets on Monday settled blended. The Euro Stoxx 50 closed down -0.81%. China’s Shanghai Composite rallied to a new 10-year high and closed up +1.51%. Japan’s Nikkei Stock 225 closed up +0.41%.
Interest ChargesSeptember 10-year T-notes (ZNU5) on Monday closed down -5.5 ticks, and the 10-year T-note yield rose +2.5 bp to 4.279%. Sep T-notes have been beneath stress on Monday as they gave back some of final Friday’s rally. Concerns that President Trump’s tariffs will push inflation up from nonetheless elevated ranges are limiting the upside in T-notes. Also, rising inflation expectations are undercutting T-note costs after the 10-year breakeven inflation expectations fee rose to a 3.5-week high on Monday of 2.435%. In addition, provide pressures are damaging for T-notes as the Treasury will public sale $211 billion of T-notes and floating-rate notes this week, starting with Tuesday’s $69 billion public sale of 2-year T-notes. Losses in T-notes have been restricted resulting from weak spot in stocks, which boosted safe-haven demand for T-notes. Also, T-notes had some constructive carryover from final Friday, when Fed Chair Powell stated draw back dangers to employment are rising and the shifting stability of dangers could warrant adjusting financial coverage. European authorities bond yields on Monday moved larger. The 10-year German bund yield rose +3.5 bp to 2.757%. 10-year UK gilts didn’t trade on Monday as markets have been closed within the UK for the summer season bank vacation.The German Aug IFO business climate survey rose +0.4 to a 16-month high of 89.0, stronger than expectations of +0.2 to 88.8.Swaps are discounting the probabilities at 1% for a -25 bp fee cut by the ECB on the September 11 coverage assembly.
US Stock MoversFurniture stocks fell Monday after President Trump stated that furnishings coming from different international locations into the US will likely be tariffed at a fee but to be decided. RH (RH) and Wayfair (W) closed down more than -5%. Also, Williams-Sonoma (WSM) closed down more than -2%. Cryptocurrency-exposed stocks slid Monday after the price of Bitcoin (^BTCUSD) fell more than -4% to a 6-week low. Strategy (MSTR), Coinbase Global (COIN), MARA Holdings (MARA), and Galaxy Digital (GLXY) closed down more than -2%.Makers of Covid-19 vaccines retreated Monday after the Daily Beast reported that the US authorities will transfer to drag MRNA vaccines from the market “within months.” Moderna (MRNA) closed down more than -6%, BioNTech SE (BNTX) closed down more than -5%, Novavax (NVAX) closed down more than -4%, and Pfizer (PFE) closed down more than -2%.The power in chip stocks on Monday restricted losses within the broader market. Nvidia (NVDA) closed up more than +1% to guide gainers within the Dow Jones Industrials. Also, Lam Research (LRCX) and KLA Corp (KLAC) closed up more than +1%. In addition, Analog Devices (ADI) closed up +0.91%, and NXP Semiconductors NV (NXPI) closed up +0.78%.Casino stocks with publicity to Macau moved larger on Monday after information confirmed gaming income in Macau within the first 17 days of August was up by +11% from the identical period final 12 months. Wynn Resorts Ltd (WYNN) closed up more than +3% and Las Vegas Sands (LVS) closed up more than +2%.
Keurig Dr Pepper (KDP) closed down more than -11% to guide losers within the S&P 500 and Nasdaq 100 after it agreed to buy JDE Peet NV for $18.4 billion. CSX Corp (CSX) closed down more than -5% and Union Pacific (UNP) closed down more than -2% after Berkshire Hathaway stated it isn’t seeking to buy a rail company.Eversource Energy (ES) closed down more than -4% after the Trump administration blocked construction of Orsted’s almost-finished Revolution offshore wind farm, of which Eversource has liabilities associated to the sale to Global Infrastructure Partners.Axogen (AXGN) closed down more than -9% after the FDA prolonged its review for the company’s Biologics License Application for Avance Nerve Graft by three months until December 5, 2025. American Eagle Outfitters (AEO) closed down more than -2% after Bank of America Global Research downgraded the stock to underperform from impartial with a price goal of $10.
Fabrinet (FN) closed up more than +6% after JPMorgan Chase upgraded the stock to chubby from impartial.Dyne Therapeutics (DYN) closed up more than +3% after Raymond James upgraded the stock to robust buy from outperform with a price goal of $35. Venture Global (VG) closed up more than +3% after UBA upgraded the stock to buy from impartial with a price goal of $18.Earnings Reports(8/26/2025)American Woodmark Corp (AMWD), Box Inc (BOX), Citi Trends Inc (CTRN), Electromed Inc (ELMD), Golden Matrix Group Inc (GMGI), MongoDB Inc (MDB), nCino Inc (NCNO), Okta Inc (OKTA), Ooma Inc (OOMA), PACS Group Inc (PACS), PVH Corp (PVH).
On the date of publication,
Rich Asplund
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