S&P 500 and Nasdaq close 1% lower as yields jump, traders await ...

Stocks retreated on Monday as rising yields and worries over the conflict in the Middle East overshadowed strong Goldman Sachs earnings and hot retail sales data.

The Dow Jones Industrial Average lost 248.13 points, or 0.65%, to close at 37,735.11. The 30-stock index relinquished an advance of more than 1% seen early in the session to mark its sixth straight losing day, a streak not seen since June. Monday's losses also pulled the blue-chip average near its 2024 flatline, a stunning turn after trading close to the 40,000 level just weeks prior.

The S&P 500 slipped 1.2% to finish at 5,061.82, despite trading up as much as 0.88% earlier in the session. The Nasdaq Composite tumbled 1.79% to 15,885.02 as Salesforce and other technology stocks dropped.

Higher rates poured cold water on the market bounce seen Monday morning. The yield on the closely followed 10-year Treasury rose above the key 4.6% level in the session and touched its highest point since mid-November.

Yields popped after data showed retail sales increased 0.7% in March, providing the latest indication that consumption remains strong despite inflationary pressures. That pace was above the 0.3% consensus forecast of economists polled by Dow Jones.

Dow, 1D

Also weighing on investor sentiment was Iran's launch of drones and missiles at Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While the majority of threats were intercepted, concerns of retaliation remain. The CBOE Volatility Index, Wall Street's fear gauge, closed at its highest level since October.

"It's really all trading off of news snippets and pieces that are coming out of the Middle East right now," said Alex McGrath, chief investment officer at NorthEnd Private Wealth. "It kind of throws this fear fly into the ointment, so to speak."

Oil prices settled lower on Monday, giving up some gains after rising in the weeks leading up to the attack. But the commodity came off lows in afternoon trading, another factor providing downward pressure on the market.

"Historically, geopolitical shocks cause short-term volatility, not long-term market declines," said Emily Bowersock Hill, CEO of Bowersock Capital Partners. "In this current environment, however, the risk of an extended period of volatility is higher, given the inflationary oil price shocks that may emanate from the heightened tensions in the Middle East."

The Dow was led down by Salesforce, which dropped more than 7% on reports that the software company was in talks to acquire data management firm Informatica. On the other hand, fellow Dow member Goldman Sachs popped nearly 3% after beating Wall Street expectations on both lines in the first quarter.

Monday's declines add to the steep losses seen last week, as lingering inflation concerns and a poor start to the new corporate earnings season weighed on traders. Both the Dow and S&P 500 saw their worst weekly performances since last year.