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All three main indexes opened higher Monday, but only one was in positive territory at the close. Tech stocks were the biggest decliners as bond yields continued to climb, while energy stocks outperformed as oil prices jumped to their highest level since early April.
At the close, the tech-heavy Nasdaq Composite was down 0.5% at 26,090 and the broader S&P 500 was off 0.07% at 7,403. The blue-chip Dow Jones Industrial Average was up 0.3% at 49,686.
Front-month West Texas Intermediate crude futures, meanwhile, climbed roughly 3% to settle at $108.66 per barrel.
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“The stock market is coming to the sudden realization that new Fed Chair Kevin Warsh may need to raise rates rather than lower them, and the market hates that,” says Richard Reyle, chief investment officer at Questar Capital Partners. “Right now, the bond market is repricing this and rates are drifting higher, which comes just as the hyperscalers enter their most capital-intensive spending cycle, which raises worries about their ability to keep funding this spending.”
The CIO says that if bond yields continue to climb, the tech sector’s leadership could be threatened. This is because higher interest rates mean future profits are worth less, which is bad news for tech companies whose valuations are based on tomorrow’s earnings.
Today, the yield on the 2-year Treasury climbed above the 4.10% level for the first time since June 2025 before ending down 2.8 basis points at 4.056%. The 10-year Treasury yield hit 4.631% — its highest mark since May 2025 — before settling at 4.597%, up 0.2 basis point on the day.
Seagate CEO issues dire warning
Rising bond yields weren’t the only headwind tech stocks faced today. Market participants also reacted to a dire warning from Seagate Technology (STX) CEO Dave Mosley.
The executive was asked earlier today at a JPMorgan conference what the data storage specialist could do to meet rising demand for memory chips, which are key to the artificial intelligence (AI) data center buildout.
“If we took the teams off and started building new factories or bringing up new machines [to increase unit capacity], that would just take too long,” Mosley said. “You would end up with more capacity, but then you’d slow the rate of growth on that technology.”
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The answer only amplified Wall Street’s fear that chip production won’t be sufficient — and sent STX down 6.9% today.
Nvidia drops ahead of earnings
Nvidia (NVDA) also closed lower today, falling 1.3% ahead of the AI chipmaker’s Wednesday afternoon turn on the earnings calendar.
“We fully expect the leading supplier of AI silicon will again exceed estimates and guide above Street given continued positive data points through Q1 as well as 1) healthy 2026 AI infrastructure spend (that we believe likely continues through 2027), and 2) superior supply chain certainty in a period plagued by constraints,” says Wedbush analyst Matt Bryson.
The real question, Bryson believes, is whether “we finally see a more positive stock reaction after a series of blasé moves following solid prints.”
We’re covering all the latest Nvidia news in our live earnings blog.
NextEra Energy drops on $67 billion M&A news
Utility stocks were also lower on Monday after news that NextEra Energy (NEE, -4.6%) will buy Dominion Energy (D, +9.4%) in an all-stock deal valued at roughly $67 billion.
If approved by regulators, the merger will create the country’s largest electricity producer, serving 10 million customer accounts in Florida, the Carolinas and Virginia.
“If successful, the deal could result in one of the largest mergers in the power industry,” says Mizuho Securities analyst Anthony Crowdell. “The acquisition would give NextEra access to the PJM [Pennsylvania-New Jersey-Maryland] market, and potentially signals NextEra moving beyond renewables-heavy to include an all-form shop.”
The transaction is expected to close in the next 12 to 18 months.
