WASHINGTON (dpa-AFX) - Following the pullback seen during last Friday's session, stocks are seeing further downside during trading on Monday. The major averages have all moved lower on the day, although selling pressure appears somewhat subdued.
Currently, the major averages are off their lows of the session but still firmly negative. The Dow is down 305.79 points or 0.6 percent at 53,254.20, the Nasdaq is down 104.83 points or 0.4 percent at 26,297.59 and the S&P 500 is down 32.18 points or 0.4 percent at 7,679.58.
The continued weakness on Wall Street comes amid concerns about a re-escalation of the military conflict in the Middle East following a period of relative calm.
Over the weekend, the U.S. and Iran traded strikes for the first time in over a month, contributing to a jump in crude oil prices.
U.S. crude oil futures are surging by more than 2 percent after the U.S. attacked two Iranian rocket launchers on Larak Island and Iran retaliated by launching an attack on two U.S. bases in Jordan.
The sharp increase in crude oil prices has contributed to renewed worries about the outlook for inflation ahead of next month's Federal Reserve meeting.
According to CME Group's FedWatch Tool, the chances the central bank will raise interest rates by a quarter point have jumped to 63.9 percent following Fed Chairman Kevin Warsh's hawkish remarks last Friday.
Treasury yields are subsequently moving notably higher on the day, with the yield on the benchmark ten-year note reaching its highest levels in well over a year.
However, traders seem somewhat reluctant to make more significant moves ahead of the release of some key economic data in the coming days, including the monthly jobs report on Friday.
Sector News
Airline stocks have moved sharply lower amid the surge in crude oil prices, with the NYSE Arca Airline Index plunging by 2.4 percent to its lowest intraday level in over three months.
Significant weakness is also visible among gold stocks, as reflected by the 2.1 percent slump by the NYSE Arca Gold Bugs Index.
Interest rate-sensitive utilities and housing stocks are also seeing considerable weakness, while energy stocks are moving notably higher along with the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both edged down by 0.1 percent, while China's Shangia Composite Index increased by 0.9 percent.
Meanwhile, European stocks have moved to the downside on the day, with the U.K. markets closed for a bank holiday. While the German DAX Index is down by 1 percent, the French CAC 40 Index is down by 0.3 percent.
In the bond market, treasuries have moved notably lower amid the surge in crude oil prices. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.0 basis points at 4.760 percent.
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