Stocks mostly ease with tech shares while oil prices climb to two-week high
FILE PHOTO: Futures-options traders work on the floor at the New York Stock Exchange's NYSE American (AMEX) in New York City, U.S., May 5, 2026. REUTERS/Brendan McDermid/File Photo
NEW YORK/LONDON, May 18 : 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 per cent, led sector declines in the S&P 500, while an index of semiconductors was down 2.5 per cent. Energy led sector gainers and was last up 1.8 per cent.
"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 per cent, to 49,686.12, the S&P 500 fell 5.45 points, or 0.07 per cent, to 7,403.05 and the Nasdaq Composite fell 134.41 points, or 0.51 per cent, to 26,090.73.
MSCI's gauge of stocks across the globe fell 0.77 points, or 0.07 per cent, to 1,098.23.
The pan-European STOXX 600 index rose 0.54 per cent.
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 per cent 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 per cent.
Earlier, Japan's 10-year yield hit a peak not seen since 1996 as the government proposed to issue fresh debt to fund a planned extra budget to cushion the economic blow from the Iran war. Germany's 10-year bond yield rose to a level not seen in 15 years.
AI, RETAIL EARNINGS TO TEST STOCKS' RECENT RALLY
The artificial intelligence trade will be tested by earnings results from Nvidia due on Wednesday, with expectations high for the world's most valuable company.
Nvidia shares ended the day 1.3 per cent lower. They are, however, up sharply since a March low, while the Philadelphia SE semiconductor index has also surged amid demand for chips as tech companies spend massively to build AI-related infrastructure.
A U.S. jury on Monday ruled against Elon Musk in his lawsuit against OpenAI, finding the AI company not liable to the world's richest person for having allegedly strayed from its original mission to benefit humanity.
Also due this week are results from a host of retailers, including Walmart, which will provide insight into how consumers are faring with high energy prices.
The dollar slipped against most major currencies as U.S. Treasury yields were off recent high levels.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.33 per cent to 99.03.
Spot gold rose 0.61 per cent to $4,565.54 an ounce.
