By Caroline Valetkevitch and Samuel Indyk<\/p>\n
NEW YORK\/LONDON, May 18 (Reuters) – Major stock indexes mostly eased as technology shares fell on Monday, while Brent oil prices climbed to a two-week high as investors assessed whether there will likely be progress soon to end the Iran war.<\/p>\n
Longer-dated U.S. Treasury \u200cyields were nearly flat after climbing to their highest level in over a year in overnight trading.<\/p>\n
Sovereign bond yields have risen sharply recently as \u200cinvestors worry the war in Iran that began in late February may bring a lasting inflationary shock. Energy costs, they fear, will feed through to consumer price inflation and lead to a U.S. Federal Reserve \u200brate hike.<\/p>\n
U.S. President Donald Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the war, after Iran sent a new peace proposal to Washington.<\/p>\n
Oil prices rose as investors digested the latest developments. U.S. crude added $3.24 to settle at $108.66 a barrel. Brent crude gained $2.84 to $112.10 – its highest close since May 4.<\/p>\n
PROFIT-TAKING IN TECH SHARES<\/p>\n
Market watchers said investors may be taking profits in tech shares, which have had a strong run recently. Also, they are bracing \u200cfor quarterly results from Nvidia<\/a> on Wednesday.<\/p>\n Technology, down 1%, led \u2060sector declines in the S&P 500, while an index of semiconductors was down 2.5%. Energy led sector gainers and was last up 1.8%.<\/p>\n “The semiconductors particularly got beaten up a little, and they’ve had a huge, huge run,” said Bruce Zaro, managing director at Granite \u2060Wealth Management in Plymouth, Massachusetts.<\/p>\n The recent rise in interest rates adds to investors’ worries, he said, noting that “there is this assumption that rising interest rates are bad for technology stocks. I would debate that in many ways.”<\/p>\n In addition, strategists noted that Trump’s first visit to Beijing since 2017 ended on Friday with no major breakthroughs on trade or tangible help from Beijing \u200bto \u200bend the U.S.-Israeli war with Iran.<\/p>\n The Dow Jones Industrial Average rose 159.95 points, or 0.32%, to \u200b49,686.12, the S&P 500 fell 5.45 points, or 0.07%, to 7,403.05 \u200cand the Nasdaq Composite fell 134.41 points, or 0.51%, to 26,090.73.<\/p>\n MSCI’s gauge of stocks across the globe fell 0.77 points, or 0.07%, to 1,098.23.<\/p>\n The pan-European STOXX 600 index rose 0.54%.<\/p>\n Rising yields push up borrowing costs and mean a higher discount for future company earnings, challenging stock valuations.<\/p>\n The yield on the benchmark 10-year Treasury note climbed to 4.659% in overnight trading, its highest level since February 2025. It has since retraced its gains and was last nearly flat on the day at 4.591%.<\/p>\n Earlier, Japan’s 10-year yield hit a peak not seen since 1996 as the government proposed to issue fresh debt to fund a planned extra budget to cushion the economic blow from the Iran \u200cwar. Germany’s 10-year bond yield rose to a level not seen in 15 years.<\/p>\n AI, RETAIL EARNINGS TO \u200bTEST STOCKS’ RECENT RALLY<\/p>\n