US markets retreat as oil prices and Treasury yields remain elevated

US equities closed lower on Monday as elevated oil prices and Treasury yields weighed on sentiment, with the 10-year yield reaching a 19-year high after US President Donald Trump was opposed to Iran’s latest proposal to reopen the Strait of Hormuz. The Dow Jones Industrial Average dropped by 347 points, while the S&P 500 declined 0.80% and the Nasdaq Composite lost 1.10%.

Investors remained cautious amid uncertainty over the prospects for a US–Iran peace deal and the possibility of further Federal Reserve interest rate hikes. Energy stocks, including Chevron and ExxonMobil, gained more than 1% as oil prices stayed elevated, while artificial intelligence hyperscalers and chipmakers felt the pressure of tight financial conditions due to record levels of debt issuance. Microsoft fell 1.30%, Amazon declined by 1.40%, and Meta shed 4.80%, while Micron moved 2.60% lower, Advanced Micro Devices lost 3.60%, and Intel retreated 5.70%. Nvidia was the exception, rising 1.70% after announcing a record $150 billion increase in its share buyback authorisation. Elsewhere, MongoDB fell sharply after its chief executive, Chirantan Desai, announced his departure to take up a senior role at Meta. Tesla also declined following a reduction in its price target by J.P. Morgan.

European equities extended their gains, although the overall mood remained cautious amid ongoing geopolitical uncertainty. The Stoxx 50 rose 0.30%, while the Stoxx 600 added 0.20%, with markets in Germany, France and the UK moving higher – the DAX gained 0.20%, while the CAC 40 was broadly unchanged at 0.01%. The FTSE 100 edged higher, supported by gains in energy stocks that helped offset weakness among mining shares. Shell and BP each rose more than 1% as oil prices remained elevated amid the ongoing US–Iran standoff. Elsewhere, ASML Holding, Linde and L'Oréal gained between 0.80% and 1.30%, while LVMH Moet Hennessy Louis Vuitton SE and Siemens added around 0.50%. In the broader Stoxx 600, Novartis rose 1.60% and ASML gained 0.80%.

Asian markets ended mixed on Monday, with technology weakness weighing on several major benchmarks. Japan's Nikkei 225 fell 0.73% to 65 877.62, ending a five-session winning streak, while the Shanghai Composite declined 1.67% to 3 823.62 as investors reassessed the outcome of the latest Trump–Xi meeting. Hong Kong bucked the trend, with the Hang Seng rising 0.60%, supported by gains in financial, selected technology and energy stocks.

Against the backdrop of cautious sentiment and persistent inflationary pressure, South African markets closed mixed. In a speech on Monday highlighting the growing strains on the global economy, South African Reserve Bank (SARB) Governor Lesetja Kganyago said tighter monetary policy would help contain inflation, which has remained above the SARB's target since March 2026. Supply constraints linked to the wars in Ukraine and Iran have also kept energy prices elevated, adding to the inflation challenge.

The JSE All Share Index fell 1.55% to 109 104.95, led by a 5.67% decline in resources. The Industrial 25 Index gained 0.74%, while financials were unchanged. The rand also weakened against the dollar, euro and pound, trading at roughly R16.41, R18.65 and R21.76, respectively.

On the commodities front, crude oil prices eased to below $93 a barrel after climbing above $96 on Monday. The decline followed reports that Saudi Arabia had restored flows through its key East–West pipeline after completing repairs. Meanwhile, reports that President Trump could consider easing sanctions on Iran and unfreezing some of its funds, provided there is tangible progress towards a nuclear agreement, have raised expectations of additional supply. Brent crude, however, gained 0.81% trading at $105.16 a barrel at 20h18 SAST. Precious metals moved lower, with gold falling 3.43% to $4 139.33 an ounce. Silver declined 4.78%, while platinum was down 2.73%.