NEW YORK, New York - U.S, stocks opened the new week weaker on Monday after the U.S. began bombing Iran again, which led to Iran bombing a U.S. base in Jordan. 

The exchange of fire occurred on Sunday. Bond markets reacted Monday as long-dated Treasury bond yields and oil prices climbed.

"The world's got enough oil for what it needs, and $80 to $90 is not so restrictive that it collapses the economy," Tom Hainlin of U.S. Bank Asset Management told CNBC Monday. "Today's indication just puts us at the high end of that range, but it doesn't change our outlook for the consumer, for business, for AI, manufacturing reshoring or continued electrification of the economy."

If oil climbs above $100 a barrel, then that may start to get "pretty prohibitive," Hainlin warned.

Dow Leads Losses

The Dow Jones Industrial Average fell 328.76 points, or 0.61 percent, to close at 53,231.23. The blue-chip index was weighed down by losses in financial and industrial components, with weaker-than-expected manufacturing data from overseas adding to concerns about global growth. Trading volume on the Dow reached 253.07 million shares.

S&P 500 Extends Decline

The broader Standard and Poor's 500 Index dropped 30.68 points, or 0.40 percent, finishing the session at 7,681.08. All 11 major sectors traded lower, with energy and materials leading the decline as commodity prices softened. The index traded in a range between 7,665.06 and 7,697.52 during the session, with volume reaching 1.676 billion shares.

Nasdaq Shows Resilience

The Nasdaq Composite proved to be the outperformer among the major U.S. averages, slipping just 31.54 points, or 0.12 percent, to end at 26,370.89. The technology-heavy index was supported by modest gains in select megacap tech names, which helped offset weakness in semiconductor and consumer discretionary stocks. Trading volume on the Nasdaq totaled 5.430 billion shares.

Market Drivers and Outlook

The day's declines came as investors digested a mixed bag of global economic signals. Weak manufacturing data from Europe and China reignited concerns about slowing global demand, weighing on cyclical and commodity-linked stocks. Meanwhile, rising bond yields added further pressure on equity valuations, particularly in interest-rate-sensitive sectors.

Sector Highlights

Energy stocks were the worst performers on the S&P 500, tracking a decline in crude oil prices amid demand concerns. Financials also struggled as the yield curve flattened, pressuring bank margins. Utilities and consumer staples posted smaller losses, offering some defensive support.

In corporate news, several technology companies outperformed, with artificial intelligence-related names attracting buying interest despite the broader market weakness. However, chipmakers came under pressure following reports of potential export restrictions.

Looking Ahead

Traders now turn their attention to Tuesday's JOLTS job openings data, which will provide the first glimpse of labor market conditions this week. Later in the week, ISM manufacturing and services PMIs, along with the highly anticipated August nonfarm payrolls report, are expected to drive market direction.

With the S&P 500 trading near record highs, analysts cautioned that valuations remain stretched, leaving the market vulnerable to any negative surprises in the data. However, the resilience of the Nasdaq suggests that investor appetite for growth-oriented names remains intact, even as broader indices consolidate.

For now, the mood on Wall Street remains cautiously optimistic, though Monday's pullback serves as a reminder that volatility is likely to persist as markets navigate a complex landscape of monetary policy expectations and global economic uncertainty.

U.S. Dollar Softens as Most Major Currencies Gain; Aussie Flat in Quiet Monday Trading

The U.S. dollar ended the first trading day of the week on a softer footing Monday, with most major currencies posting gains against the greenback in a subdued session characterised by thin summer volumes and a lack of major economic catalysts. The Australian dollar was the sole exception, finishing flat against the dollar as commodity-linked currencies struggled for direction.

Euro Leads Gains

The euro advanced against the dollar, with the EUR-USD pair settling at 1.1615, up 0.26 percent on the session. The single currency benefited from a modest risk-on tone in early European trading, though gains were capped by lingering concerns over the region's economic outlook. Traders noted that the euro's uptick was largely driven by dollar weakness rather than any particular strength in eurozone fundamentals.

Yen and Pound Edge Higher

The Japanese yen also strengthened, with the USD-JPY pair settling at 159.7900, a decline of 0.19 percent for the dollar. The move reflected mild safe-haven demand for the yen amid mixed global equity performance, though intervention watch remained a backdrop as the pair continues to trade near multi-decade highs.

The British pound posted a modest gain, with GBP-USD rising to 1.3547, an increase of 0.07 percent. Sterling found some support from expectations that the Bank of England will maintain its restrictive monetary policy stance longer than its peers, though the gain was restrained by ongoing uncertainty over the UK economic outlook.

Canadian Dollar and Swiss Franc Strengthen

The Canadian dollar advanced against its U.S. counterpart, with USD-CAD falling to 1.3858, a drop of 0.34 percent. The loonie was supported by a rebound in crude oil prices, though gains were tempered by concerns over global demand and the prospect of further policy easing from the Bank of Canada.

The Swiss franc also appreciated, with USD-CHF declining to 0.8085, a fall of 0.07 percent. The franc remained firmly bid as investors continued to favor the safe-haven currency amid geopolitical uncertainties and volatile equity markets.

Aussie Dollar Flat

The Australian dollar was the only major currency to post no change against the greenback, with AUD-USD holding steady at 0.7164, unchanged in percentage terms on the day. The currency came under pressure from weaker-than-expected Chinese economic data released overnight, which weighed on commodity prices and diminished the appeal of the resource-linked Aussie. The flat performance also reflected a broader consolidation phase after recent gains, with traders awaiting clearer signals from the Reserve Bank of Australia on future rate policy.

Market Sentiment and Outlook

The dollar's broad decline on Monday came despite a lack of fresh U.S. economic data, with investors instead focusing on position squaring ahead of key employment figures due later in the week. Treasury yields remained relatively stable, offering little direction for the greenback.

Looking ahead, traders will closely monitor U.S. job openings and manufacturing data on Tuesday, as well as any comments from Federal Reserve officials, which could provide fresh impetus for the dollar. Meanwhile, the Australian dollar's next move will likely hinge on Chinese stimulus measures and commodity price trends, with the currency expected to remain sensitive to global growth signals.

For now, the dollar's softer tone suggests that the greenback remains vulnerable to further declines, though the absence of major directional catalysts points to continued range-bound trading in the sessions ahead.

Global Stock Markets Close Mixed on Monday as European Stocks Slide, Asian Indices Show Resilience

Global stock markets delivered a mixed performance to close the first trading day of the week, with European bourses weighed down by renewed economic concerns while Asian markets showed modest resilience. The trading session saw sharp divergences across major indices, reflecting cautious investor sentiment ahead of key economic data releases later in the week.

European Markets Suffer Broad Losses

European equities ended firmly in the red, led by a sharp decline in Germany's DAX. The DAX P closed at 26,258.11, losing 311.88 points, or 1.17 percent, as automobile and industrial stocks came under pressure amid fears of slowing global demand.

France's CAC 40 fell 66.68 points, or 0.79 percent, to finish at 8,334.50, while the broader EURO STOXX 50 Index dropped 65.51 points, or 1.01 percent, ending the session at 6,420.16. The Euronext 100 Index also retreated, shedding 11.85 points, or 0.61 percent, to close at 1,915.31.

Belgium's BEL 20 declined by 34.80 points, or 0.59 percent, settling at 5,834.28.

Meanwhile, the FTSE 100 in London bucked the regional trend, adding 31.76 points, or 0.29 percent, to close at 10,824.26, supported by a rebound in energy and mining shares.

Canadian Market Slides

North American losses were not confined to U.S. exchanges. Canada's S&P/TSX Composite Index fell 283.44 points, or 0.78 percent, to close at 36,270.48. The decline in Toronto was led by energy and mining shares, tracking lower commodity prices, with trading volume reaching 109.116 million shares. The Canadian benchmark underperformed its U.S. peers, reflecting the resource-heavy composition of the index.

Asia-Pacific Shows Mixed But Resilient Performance Monday

In Asia, Japan's Nikkei 225 closed marginally lower, falling 93.63 points, or 0.14 percent, to finish at 66,311.93, as tech shares failed to sustain early gains.

In China, the SSE Composite Index outperformed, rising 34.12 points, or 0.86 percent, to close at 3,986.30, with trading volume reaching 1.831 billion shares, as investors welcomed fresh policy signals from Beijing.

Hong Kong's Hang Seng Index dipped just 17.80 points, or 0.07 percent, to end at 25,566.99, after a volatile session that saw the index recover from earlier lows.

The Australian benchmarks edged lower. The S&P/ASX 200 fell 16.30 points, or 0.18 percent, to 9,076.00, while the broader All Ordinaries Index slipped 22.90 points, or 0.25 percent, closing at 9,271.40. In New Zealand, the S&P/NZX 50 was the standout performer in the region, surging 149.12 points, or 1.08 percent, to 13,917.30.

India's S&P BSE Sensex dropped 307.23 points, or 0.40 percent, to finish at 76,957.27, weighed down by financial and IT stocks.

In South Korea Monday, the KOSPI Composite Index posted a solid gain, rising 31.14 points, or 0.46 percent, to close at 6,820.02. 

Southeast Asian and Other Markets

Singapore's STI Index advanced 55.43 points, or 0.97 percent, to end at 5,755.36, buoyed by gains in banking and property stocks. Indonesia's IDX Composite edged up 7.36 points, or 0.11 percent, finishing at 6,525.48.

Malaysia's FTSE Bursa Malaysia KLCI was unchanged on the day, closing flat at 1,725.88, as gains in select plantation stocks offset losses in telecoms.

Taiwan's TSEC Capitalization Weighted Index declined 202.98 points, or 0.44 percent, to 46,128.47, while Israel's TA-125 fell 25.35 points, or 0.62 percent, settling at 4,056.60.

Emerging Markets 

In the Middle East, Egypt's EGX 30 Price Return Index dipped 71.30 points, or 0.13 percent, to 54,866.00, with turnover of 523.346 million Egyptian pounds.

South Africa's Top 40 USD Net TRI Index recorded the steepest decline of the session, plunging 151.09 points, or 2.04 percent, to close at 7,247.49, pressured by a weaker rand and broad-based selling in resources.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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