Oil swings drive market nerves
The S&P 500 swivelled between gains and losses before finishing with a dip of 0.1%, its second loss since setting an all-time high last week. The Dow Jones Industrial Average added 159 points, or 0.3%, and the Nasdaq composite fell 0.5% after both indexes likewise yo-yoed.
Stock prices moved in the opposite direction of oil prices, which have been twitchy because of uncertainty about how long the Iran war will keep the Strait of Hormuz closed and prevent oil tankers from delivering crude.
For US traders, the price for a barrel of Brent crude oil, the international standard, went from a high of $US112 overnight to below $US107 in the morning before turning back higher.
After settling at $US112.10 per barrel, Brent's price then fell back below $US109 after President Donald Trump said late in the day that he would hold off on a military attack on Iran planned for Tuesday, at the request of allies in the region. That kept alive hopes that a deal to open the Strait of Hormuz may still be possible.
Bond yields stay in focus
The moves for oil prices have helped make the world's bond markets the centre of the action recently. Climbing yields there have cranked up the pressure on economies and stock markets worldwide.
Higher yields make it more expensive for households and businesses to borrow, which US homebuyers know because of higher mortgage rates. Higher interest rates could also make it more difficult for companies to borrow to build data centres for artificial-intelligence technology, which has been driving much of the US economy's growth.
In the bond market, the yield on the 10-year Treasury got as high as 4.63% before falling back to 4.59%, where it was late on Friday. The yield on the 10-year Japanese government bond rallied toward its highest level since the late 1990s.
Yields worldwide have been climbing on fears about higher inflation caused by higher oil prices, which could push central banks not only to abandon the possibility of cutting interest rates but also consider hiking interest rates. Higher rates would slow inflation at the cost of hurting the economy and dragging on prices for stocks and other investments.
Several solid reports on the US economy recently, along with worries about the US government's huge and growing debt problem, are also pushing upward on yields.
All told, the S&P 500 fell 5.45 points to 7,403.05. The Dow Jones Industrial Average added 159.95 to 49,686.12, and the Nasdaq composite fell 134.41 to 26,090.73.
Nvidia earnings loom
The coming week will offer little in terms of data on the US economy, but a heavily anticipated report on Nvidia's latest quarterly results will arrive on Wednesday.
The chip company has routinely blown past analysts' expectations each quarter, while forecasting even bigger growth than Wall Street had thought. It will likely need to keep up such momentum to keep AI stocks driving the market to more records.
Retailers Target, Home Depot and Walmart will also report their latest quarterly results this week.
In stock markets abroad, indexes fell in much of Asia but reversed losses in Europe to finish higher. Japan's Nikkei 225 sank 1%, but Germany's DAX returned 1.5% for two of the world's bigger moves.
Australian stocks fell to a seven-week low on Monday on the back of higher oil prices and ongoing worries about inflation.
The Associated Press
