US close: Market end mixed, but tech stocks prop up Nasdaq

US stocks finished mixed on Monday after struggling for direction for most of the day, as big swings in bond yields provided the backdrop for a tumultuous trading session.

Meanwhile, traders were watching newsflow from Israel closely, as Hamas released two more civilian hostages. However, negotiations around the release of further captives stalled, meaning that humanitarian aid is mostly still being blocked.

At the same time, heavy bombing of Gaza by the Israeli government continued, while concerns of the conflict spreading further afield continued to grow.

After a brief spell in positive territory, the Dow Jones Industrial Average dropped into the red by the close, finishing down 0.6%; the S&P 500 followed a similar pattern, though losses were limited to 0.2%. However, the Nasdaq closed 0.3% higher as gains from heavyweight tech stocks provided a lift.

The yield on a 10-year US Treasury surged to an intraday high – and fresh 16-year high – of 5.022% early on. However, the yield had fallen to 4.849% by the closing bell, down 7.8 basis points on the day, after Pershing Square’s Bill Ackman said he had covered his bond shorts, citing rising geopolitical and economic risk.

“There is too much risk in the world to remain short bonds at current long-term rates,” he wrote in a post on X. "We covered our bond short."

The economic data calendar was sparse on Monday, though things are set to pick up in the coming days with US PMIs, inflation, GDP and durable goods orders figures scheduled for release.

Chevron buys Hess

Chevron shares were down nearly 4% on news that it was to acquire Hess in an all-stock transaction worth $53bn. The oil giant said the combined company will grow production and free cash flow "faster and for longer" than its current five-year guidance.

"This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets," said Chevron's chairman and chief executive Mike Wirth.

Tech stocks finished mostly higher as investors awaited earnings from reports from most of the so-called Magnificent Seven. Microsoft, Alphabet, Meta and Amazon are all scheduled to release earnings over the next three days, followed by Apple during the following week.

“Expect more chatter about AI but that alone may not be enough to sustain these stocks, with valuations allowing little margin for error when it comes to the hard currency of revenue and earnings. Even in-line numbers may result in raspberries from the market," said AJ Bell investment director Russ Mould.

Pharmacy chain Walgreens jumped after analysts at JPMorgan raised their rating on the stock from 'neutral' to 'overweight', while cosmetics group e.l.f Beauty was boosted by an upgrade from Raymond James from 'strong buy' to 'outperform'.