US stocks fall as ME tensions, Treasury yields weigh

NEW YORK — US stocks closed sharply lower on Monday, as an early lift from a strong retail sales report succumbed to a jump in Treasury yields and concerns about rising geopolitical tensions in the Middle East (ME) between Iran and Israel.

With the S&P 500 coming off its biggest one-day percentage drop since Jan. 31 in the prior session, stocks opened higher in part after data showed retail sales increased by more than expected in March.

Also providing early support were gains in some financial stocks after their quarterly results, as Goldman Sachs rose 2.92% after its first-quarter profit beat Wall Street estimates, fueled by a recovery in underwriting, deals and bond trading that lifted its earnings per share to the highest since late 2021.

M&T Bank jumped 4.74% after forecasting better-thanexpected annual net interest income, while brokerage Charles Schwab advanced 1.71% despite reporting a fall in quarterly profit. The stocks were the three best performers in the S&P 500 financial sector.

But gains faded over concerns the hostilities between Israel and Iran could continue to flare, and Treasury yields jumped, with the benchmark 10-year US Treasury note hitting its highest level since November.

The Dow Jones Industrial Average fell 248.13 points or 0.65% to 37,735.11; the S&P 500 lost 61.59 points or 1.2% to 5,061.82; and the Nasdaq Composite lost 290.07 points or 1.79% to 15,885.02.

The S&P 500 is now down 2.64% over the past two sessions, it’s biggest two-day drop since early March 2023. The index also closed below its 50-day moving average, a technical support level, for the first time since Nov. 2.

Each of the 11 major S&P sectors were lower, with the rate-sensitive real estate and utilities sectors among the worst performers.

Apple fell 2.19% as one of the biggest drags on the S&P 500 after data from research firm IDC showed the company’s smartphone shipments dropped about 10% in the first quarter of 2024.

Tesla slumped 5.6% after the electric vehicle maker said it will lay off more than 10% of its global workforce, according to an internal memo seen by Reuters.

Salesforce stumbled 7.28% after Reuters reported, citing a source, that the customer relations software maker was in advanced talks to acquire Informatica.

On the New York Stock Exchange (NYSE), declining issues outnumbered advancing ones by a 5.1-to-1 ratio and on the Nasdaq, decliners outnumbers advancers by a 3.5-to-1 ratio.

There were 39 new highs and 138 new lows on the NYSE while on the Nasdaq, there were 37 new highs and 333 new lows.