In midday trading on Monday, U.S. stocks attempted a rebound following sharp losses experienced Friday.
The bond market continued its downward spiral, with Treasury yields soaring to levels not seen in over a decade across maturities ranging from 10 to 30 years.
The energy sector continued to outperform, driven by oil giants capitalizing on crude prices that have remained at or above $90 per barrel.
The U.S. dollar surged to its highest point in the past 10 months, on track for its eleventh consecutive week of gains. This remarkable ascent has been propelled by the Federal Reserve’s hawkish stance and deteriorating economic prospects in Europe.
Cues From Monday’s Trading:
The S&P 500 rose 0.4% on Monday, following a 1.6% decline on Friday and a nearly 3% drop last week.
The Nasdaq 100 gained 0.4%, reacting after a 3.6% decline last week. The Dow Jones Industrial Average was flat for the day, while small caps in the Russell 2000 soared 0.6% after sinking 3.8% last week.
US Index Performance On Monday
Analyst Color:
The S&P 500 is down nearly 4% on the month, and technical damage is beginning to mount, said LPL Financial’s Chief Technical Strategist Adam Turnquist. “While weak September seasonality is capturing the blame, selling pressure has primarily been driven by a jump in interest rates,” he said.
Technically, the S&P 500 has broken to the downside of a symmetrical triangle formation, Turnquist said. He flagged the sub-4,330 level as downside support in the 4,200-4,300 area, followed by the 200-day moving average at 4,189.
Despite the recent pullback, there have been no major signs of a sustainable flight to safety, the analyst said. “Overall, we believe the market is down but not out,” he said.
“Pullbacks are completely normal within the context of a bull market, and while the jump in rates is concerning, the S&P 500 remains in an uptrend, and above its rising 200-DMA.”
Source: LPL Financial
Monday’s Trading In Major US Equity ETFs
Looking at S&P 500 sector ETFs:
Stocks In Focus:
Commodities, Bonds, Other Global Equity Markets:
Crude oil slightly fell by 0.2%, with a barrel of WTI-grade crude trading at $89.70. The United States Oil Fund ETF (NYSE:USO) was 0.1% lower to $80.50.
Treasury yields were sharply higher, with the 10-year yield up by 9 basis points to 4.52% and the 30-year yield up by 12 basis points to 5.65%. The iShares 20+ Year Treasury Bond ETF (NYSE:TLT) was 2.1% lower for the day.
The dollar rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 0.3%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), was 0.5% lower to 1.0591.
European equity indices had a negative session. The SPDR DJ Euro STOXX 50 ETF (NYSE:FEZ) fell 1%.
Gold edged 0.4% lower to $1,916/oz, while silver fell 1.8% to $23.11. Bitcoin (CRYPTO: BTC) was 0.4% higher to $26,345.
Staff writer Piero Cingari updated this report midday Monday.
Photo via Shutterstock.
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