By Caroline Valetkevitch and Samuel Indyk
NEW YORK/LONDON, May 18 (Reuters) – Major stock indexes mostly eased as technology shares fell on Monday, while Brent oil prices climbed to a two-week high as investors assessed whether there will likely be progress soon to end the Iran war.
Longer-dated U.S. Treasury yields were nearly flat after climbing to their highest level in over a year in overnight trading.
Sovereign bond yields have risen sharply recently as investors worry the war in Iran that began in late February may bring a lasting inflationary shock. Energy costs, they fear, will feed through to consumer price inflation and lead to a U.S. Federal Reserve rate hike.
U.S. President Donald Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the war, after Iran sent a new peace proposal to Washington.
Oil prices rose as investors digested the latest developments. U.S. crude added $3.24 to settle at $108.66 a barrel. Brent crude gained $2.84 to $112.10 – its highest close since May 4.
PROFIT-TAKING IN TECH SHARES
Market watchers said investors may be taking profits in tech shares, which have had a strong run recently. Also, they are bracing for quarterly results from Nvidia on Wednesday.
Technology, down 1%, led sector declines in the S&P 500, while an index of semiconductors was down 2.5%. Energy led sector gainers and was last up 1.8%.
“The semiconductors particularly got beaten up a little, and they’ve had a huge, huge run,” said Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts.
The recent rise in interest rates adds to investors’ worries, he said, noting that “there is this assumption that rising interest rates are bad for technology stocks. I would debate that in many ways.”
In addition, strategists noted that Trump’s first visit to Beijing since 2017 ended on Friday with no major breakthroughs on trade or tangible help from Beijing to end the U.S.-Israeli war with Iran.
The Dow Jones Industrial Average rose 159.95 points, or 0.32%, to 49,686.12, the S&P 500 fell 5.45 points, or 0.07%, to 7,403.05 and the Nasdaq Composite fell 134.41 points, or 0.51%, to 26,090.73.
MSCI’s gauge of stocks across the globe fell 0.77 points, or 0.07%, to 1,098.23.
The pan-European STOXX 600 index rose 0.54%.
Rising yields push up borrowing costs and mean a higher discount for future company earnings, challenging stock valuations.
The yield on the benchmark 10-year Treasury note climbed to 4.659% in overnight trading, its highest level since February 2025. It has since retraced its gains and was last nearly flat on the day at 4.591%.