Wall Street mixed as Treasury yields ease, oil prices retreat

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By Ragini Mathur and Utkarsh Hathi

May 18 (Reuters) – U.S. stock indexes were mixed in choppy trading on Monday even though the bond-market selloff that had pressured equities last week showed signs of cooling and oil prices pulled back.

The 10-year Treasury yield, the benchmark for global borrowing costs, fell to 4.573%, having climbed as much as 4.631% to its highest level since February 2025 earlier in the session. [US/]

Oil prices also moved lower, with Brent crude down nearly 2%, after reports said the U.S. had proposed a temporary waiver on Iranian oil sanctions, easing some concerns about supply disruptions. Iranian officials did not immediately comment.

“Yields are key to all of this because growth stocks, especially AI-related companies, are priced on forward-looking earnings. When yields move higher, their current valuations come down. That’s really the key issue for the market,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

The recent bond-market selloff was fueled by a surge in oil prices, which has stoked concerns of inflation potentially keeping borrowing costs elevated as efforts to end the Iran war appeared to stall.

At 10:02 a.m. ET, the Dow Jones Industrial Average rose 139.25 points, or 0.28%, to 49,665.42, the S&P 500 gained 3.27 points, or 0.04%, to 7,411.61 and the Nasdaq Composite lost 35.93 points, or 0.14%, to 26,189.22.

Consumer services and the financial sector led gains on the S&P 500, while information technology and energy were among the weakest performers.

Wall Street had rallied sharply in recent weeks, with the benchmark S&P 500 and the tech-heavy Nasdaq reaching record highs as enthusiasm around artificial intelligence helped investors look past the inflationary threat from soaring oil prices.

Traders are now pricing in a more than 38.8% chance the U.S. Federal Reserve will raise interest rates in January, according to CME’s FedWatch tool, after last week’s hotter-than-expected inflation readings.

The world’s most valuable company, Nvidia, is scheduled to report results on Wednesday.

Expectations are high for the company, whose shares have risen 36% from a March low, while the Philadelphia SE Semiconductor Index has surged more than 60% this year on strong demand for AI-related chips.

Walmart, the largest retailer in the world, is also expected to report earnings this week, which could offer a clearer picture of how U.S. consumers are coping with higher energy prices and broader inflation pressures.

In other movers on the day, Dominion Energy jumped 10.5% after power firm NextEra Energy said it would buy the smaller utility in an all-stock deal valued at about $66.8 billion. NextEra shares fell 4.2%.

Shares of Regeneron fell 11.5% after the drugmaker’s experimental treatment missed the main goal in a late-stage trial in patients with advanced melanoma, a type of skin cancer.

Advancing issues outnumbered decliners by a 2.12-to-1 ratio on the NYSE, and by a 1.26-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and 11 new lows, while the Nasdaq Composite recorded 42 new highs and 95 new lows.

(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by Pooja Desai and Maju Samuel)