US Stocks Hover Near Records as Oil Prices Decline

NEW YORK — US stocks near records traded mixed Monday as investors balanced falling oil prices against growing concerns that inflation could keep interest rates elevated for longer.

The S&P 500 slipped 0.3% in afternoon trading after posting its 11th weekly gain in the last 12 weeks. The benchmark index remained just 1.7% below the record high it reached earlier this month.

Meanwhile, the Dow Jones Industrial Average gained 164 points, or 0.3%, while the Nasdaq Composite fell 1.2%, weighed down by losses in technology and growth stocks.

Oil Prices Retreat Following US-Iran Talks

A key driver of Monday’s market activity was the decline in oil prices after diplomatic talks between the United States and Iran showed signs of progress.

Vice President JD Vance said discussions over the weekend established a “good foundation for a successful final deal,” raising hopes that tensions in the Persian Gulf could ease.

An eventual agreement could allow oil shipments to move freely through the Strait of Hormuz, a critical global energy route.

As a result:

• Brent crude fell 3.6% to $77.70 per barrel.
• U.S. benchmark crude dropped 2.7% to $74.55 per barrel.

The decline pushed oil prices closer to levels seen before the conflict began earlier this year.

Inflation Concerns Keep Bond Yields Rising

Despite lower energy prices, Treasury yields continued climbing as investors increasingly expect the Federal Reserve may need to raise interest rates later this year.

Economists forecast that a key inflation report due Thursday will show consumer inflation accelerated to 4.1% in May, up from 3.8% in April.

The yield on the 10-year Treasury note rose to 4.51%, compared with 4.46% before the holiday weekend and 3.97% before the Iran conflict escalated.

Market expectations for Federal Reserve action have shifted significantly:

• Traders now see a 90% chance of at least one rate hike before year-end.
• Just one week ago, those odds stood at 57%.
• A small group of investors is even pricing in multiple increases.

Higher interest rates typically increase borrowing costs for consumers and businesses while putting pressure on stock valuations.

Growth Stocks Face Pressure

The rise in bond yields has created challenges for high-growth companies, particularly those benefiting from the artificial intelligence investment boom.

Among the biggest movers was SpaceX, which fell 10.7% as investors continued to reassess the company following its recent public market debut.

The stock moved closer to $165 per share after three consecutive sessions of losses. SpaceX initially priced its shares at $135 during its highly anticipated market launch.

Investors often become more cautious toward expensive growth stocks when interest rates rise because future earnings become less valuable in present-day terms.

AbbVie Surges on Major Acquisition Deal

While technology stocks struggled, healthcare shares delivered some of the market’s strongest gains.

AbbVie jumped 7.1% after announcing an agreement to acquire Apogee Therapeutics in a deal valued at approximately $10.9 billion.

The acquisition gives AbbVie access to a pipeline of treatments targeting inflammatory, dermatologic, respiratory and immune-related diseases.

Apogee Therapeutics shares surged 46.7% following the announcement.

International Markets Post Gains

Global markets delivered a stronger performance than Wall Street.

In Europe, the United Kingdom’s FTSE 100 advanced 0.7% after Prime Minister Keir Starmer announced plans to step down as Labour Party leader and leave office in the coming weeks.

Asian markets also posted notable gains:

• Japan’s Nikkei 225 climbed 1.5% to another record high.
• South Korea’s Kospi gained 0.7%, reaching a new all-time high.

Both indexes were supported by continued enthusiasm for artificial intelligence-related companies.

Investors Focus on Inflation and Rates

The outlook for US stocks near records will likely depend on upcoming inflation data and the Federal Reserve’s response.

While falling oil prices have eased some concerns about energy costs, investors remain focused on whether inflation will stay elevated enough to force additional rate increases.

For now, Wall Street remains close to record territory, but rising Treasury yields continue to pose a challenge for equities as markets assess the next phase of economic and monetary policy.