The S&P 500 fell on Monday, weighed down by further gains in oil prices and a steep decline in tech, as traders looked past comments from Federal Reserve Chair Jerome Powell on inflation.
The broad-based index dipped 0.39%, posting a third straight losing session and settled at 6,343.72. The S&P 500 was just over 9% off its closing high. The move lower was led by declines in the technology sector, which fell more than 1%. On the flip side, sectors such as financials and utilities saw gains. The Nasdaq Composite dropped 0.73% to 20,794.64. The Dow Jones Industrial Average added 49.50 points, or 0.11%, and closed at 45,216.14.
The CBOE Volatility Index, otherwise known as Wall Street's fear gauge, topped 30 during the session.
U.S. oil prices also rose to start the week, with West Texas Intermediate futures settling up 3.25% at $102.88 per barrel — its highest close since July 19, 2022. Brent crude futures inched up 0.19% to $112.78 a barrel and were on pace the biggest monthly surge ever with a 55% rise in the period.
Fed Chair Powell said Monday that even with rising energy prices, he sees inflation expectations as "well anchored beyond the short term." While he did say that the central bank could "eventually maybe face the question of what to do here," he stressed that it's "not really facing it yet, because we don't know what the economic effects will be."
The yield on the 10-year Treasury slipped following those remarks. The benchmark yield was last down 9 basis points at 4.35%.
Meanwhile, President Donald Trump offered some hope to investors that an end to the war against Iran could be drawing near. The president in a post on Truth Social Monday that the U.S. is "in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran," adding that "great progress has been made."
However, the president also said that if a peace deal is not reached "shortly" and the Strait of Hormuz is not "immediately" reopened, the U.S. will "conclude our lovely 'stay' in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet 'touched.'"
This comes after Trump said Sunday that Tehran had accepted most of the U.S.' 15-point plan to end the war and that Iran has agreed to allow an additional 20 oil ships to cross the Strait.
"Investors have just been accustomed to kind of this new anomaly that markets tend to do poorly on Thursday [and] Fridays, and tend to do well Monday [and] Tuesday," said David Wagner, head of equities at Aptus Capital Advisors.
Wagner noted that in the last 90 trading days, the cumulative returns for the market between Thursday and Friday have lagged those recorded between Monday and Wednesday by approximately 7%, with almost all of that divergence occurring since Feb. 28, when the war broke out.
"It's kind of like preparing for bad news ... heading into the weekend to hedge themselves, so they do some risk-taking, and then at the beginning of the week, they tend to pile back in. It just seems like some of that risk-taking being taken off the table is just occurring a little bit sooner than what it has over the past few weeks," he said.
Wall Street is coming off a losing week, with the Dow and Nasdaq tipping into correction territory as fears among traders that higher energy prices could hurt the economy have persisted. The Dow, Nasdaq and S&P 500 all posted their fifth straight weekly declines.
The market will be closed on Friday in observance of Good Friday, although the March jobs report is still scheduled for release that morning.
