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Investing.com – The S&P 500 was flat Monday, as gains in cyclical sectors including energy and financials were kept in check by a weakness in tech stocks amid pressure from surging Treasury yields.
The S&P 500 fell 0.1%, the Dow Jones Industrial Average gained 0.4%, or 150 points, the Nasdaq was down 0.41%.
Energy added to gains from last week as oil prices soared on expectations for tighter crude supplies as energy demand continues to recover.
Goldman Sachs (NYSE:GS) raised its 2022-to-2023 Brent price forecast to range of $81 to $85 per barrel from $75 to $65 per bbl, amid expectations for “reduced OPEC spare capacity as global demand recovers, structural cost inflation across the oil curve and a higher oil price required for US producers to grow given the increase in the cost of capital.”
Occidental Petroleum (NYSE:OXY), Cabot Oil & Gas (NYSE:COG), and Diamondback Energy (NASDAQ:FANG) were up more than 7%.
Financials were boosting by an ongoing bid in bank stocks, underpinned by a climb in Treasury yields as the 10-year Treasury rose above 1.5%, before retreating.
The rise in yields comes as investors bet the Federal Reserve may have to raise rates sooner than many expect as supply-chain issues will continue to boost the pace of inflation.
“New COVID-19 outbreaks have shut factories in Vietnam and China, adding to higher year-over-year raw materials and shipping costs, and ongoing U.S. port delays unloading shipping containers,” Da Davidson said in a note. “In the U.S. labor shortages are pressuring both the shipping and trucking segments, causing additional delays.”
Lincoln National (NYSE:LNC), People’s United Financial (NASDAQ:PBCT), and M&T Bank (NYSE:MTB) were up about 6% on the day.
In tech, Apple (NASDAQ:AAPL), was down nearly 1% amid fears supply chain issues could delay the tech giant’s shipments of iPhones.
Sentiment on tech was also sourced by rising rates and inflation.
Investors in growth sectors like tech, which tend to have higher valuations, usually have to wait longer to recoup their investments, which is unattractive in an inflationary environment, where money today, is worth more than money in the future.
Microsoft (NASDAQ:MSFT) (NASDAQ:{{252|MSFT}, Google-parent Alphabet NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) were in the red, while Facebook (NASDAQ:FB) traded above the flatline.
On the economic front, monthly durable goods orders rose by 1.8% in August, the largest monthly increase since May.
“Headline orders were boosted by a rebound in the civilian aircraft component, as signaled by data from Boeing (NYSE:BA); the consensus forecast always looked too low,” Pantheon Macroeconomics said in a note.
