U.S. stocks finished Monday lower but well off their session lows as investors weighed renewed uncertainty around the artificial-intelligence investment cycle, elevated oil prices and a Treasury market that briefly pushed the 10-year yield above 5%.
The Dow fell 152 points to 52,421, the NASDAQ Composite lost 0.56% to 26,186, and the S&P 500 declined 0.48% to 7,620. AI-linked shares came under pressure after prominent industry executives called for slowing model development on safety grounds.
Sector performance showed the weakness was not uniform. Communication Services gained 2.17%, while Health Care and Consumer Staples also advanced, reflecting pockets of defensive strength. Technology fell 1.82%, and Industrials were also among the session’s weakest groups, led by the decline of electrical equipment giants. The divergence suggested investors were rotating within the market rather than broadly abandoning equities.
Treasury trading was volatile but ultimately steadied. The 5-year Treasury yield moved up 4 basis points to nearly 4.83%, while the 10-year advanced 2 basis points to 4.99%. Brent crude remained above $106 per barrel late in the session after approaching $110 earlier, keeping energy-driven inflation risks in focus. The current Fed Funds market is pricing in effectively 4 rate hikes over the course of the next year.
With no major U.S. economic releases Monday, attention now shifts to the Federal Reserve’s two-day meeting beginning Tuesday. Wednesday brings the Fed’s interest-rate decision and updated economic projections, along with retail-sales data, making monetary-policy guidance and the outlook for inflation particularly important after the recent rise in oil and bond yields; however, the market may just be disappointed as the new Chair Kevin Warsh attempts to move away from Fed guidance. Adams Wealth Advisors will continue to keep you informed.