US stocks fell on Monday as rising Treasury yields renewed concerns about inflation and further Federal Reserve rate increases.
The Dow Jones Industrial Average dropped more than 300 points, while the S&P 500 fell 0.8% and the Nasdaq Composite declined 0.9%.
Treasury yields continued to climb, with the US 10-year yield ending above 5.2%, near levels not seen since 2007. The 30-year yield rose above 5.56%, around its highest level since 2004.
Oil prices also moved higher amid continued uncertainty surrounding the Iran war. President Donald Trump said the US was poised to win the war “very soon”, although reports suggested an agreement between the two countries was unlikely in the near term.
Higher oil prices and persistent inflation concerns strengthened expectations for further Fed tightening. Markets are now pricing around a 70% chance of a 25-basis-point rate increase in October, up from 64% on Friday.
Boeing was among the session’s biggest laggards, falling 6.9% after US regulators delayed certification of its 737 MAX 10 due to a newly disclosed software issue.
Australian Market Outlook
Australian shares are set for a subdued start, with S&P/ASX 200 futures up just 1 point at 8,721.
The local market faces pressure from rising global bond yields and renewed inflation concerns, while investors are also preparing for Tuesday’s Reserve Bank of Australia interest rate decision.
Attention will remain on oil prices and developments in the Iran war, while US consumer confidence and jobs data due later on Tuesday could provide further direction for global bond yields and interest rate expectations.
