Dow, S&P 500, Nasdaq Futures Fall Amid Rising Bond Yields, AI Concerns: KOD, SMMT, CLF, VKTX Stocks In Focus

U.S. stock markets were rattled by rising Treasury yields even as oil prices surged and additional concerns about the artificial intelligence sector weighed on investor sentiment.

• The benchmark 10-year Treasury yield soared past 5.2% on Monday, nearing levels not seen since 2007, while the 30-year yield topped 5.56%, trading around a 2004 high.
• The war with Iran is now entering its eighth month, straining global energy supplies amid a choked Strait of Hormuz.
• Earlier on Monday, Axios reported that as per certain U.S. officials,  President Trump was willing to offer Iran sanctions relief and release Iranian frozen funds in return for concrete steps regarding its nuclear program, but Trump subsequently denied the report on Truth Social. 

U.S. stock futures fell in overnight trading late Monday as the effects of the Iran war, rising oil prices and AI jitters pushed long-dated bond yields to multi-decade highs. 

As of 11:04 p.m. ET, Dow futures were down 0.20%, the S&P 500 futures slipped 0.24%, while Nasdaq-100 futures declined 0.40%.

On Monday, all three benchmark indexes closed lower. The Nasdaq Composite led the decline, shedding 248 points to close 0.92% lower. The Dow Jones Industrial Average and S&P 500 fell 0.67% and 0.77% respectively. 

Index	Move	Close
Dow Jones Industrial Average	-0.67%	51,481.51
S&P 500	-0.77%	7,683.69
Nasdaq Composite	-0.92%	26,820.38

Key US Market Drivers

U.S. stock markets were rattled by rising Treasury yields even as oil prices surged and additional concerns about the artificial intelligence sector weighed on investor sentiment. 

The benchmark 10-year Treasury yield soared past 5.2% on Monday, nearing levels not seen since 2007. Meanwhile, the 30-year yield topped 5.56%, trading around a 2004 high.

Brett Erickson, Managing Principal at Obsidian Risk Advisors, noted the rising yields, adding that the Iran war was no longer sustainable. 

In a post on X, Erickson said, “As of this morning, the U.S. bond yields on the 10-year and the 30-year have reached new Iran War highs. The U.S. 30-year has reached a new peak of 5.548%, up from 4.630% on the day before the Iran War began. A 19.83% increase in relative yield, up 91.8 basis points. The U.S. 10-year has also reached a new peak of 5.234%, up from 3.96% on the day before the Iran War began. A 32.2% increase in relative yield, up 127.4 basis points. This. War. Is. Not. SUSTAINABLE.”

However, global asset manager BlackRock noted that rising yields were the latest instance of the post-pandemic drift towards higher government borrowing costs. 

“An intensifying competition for capital and inflationary pressure from limited supplies of energy and workers may well keep pushing up on bond yields. We think that creates some income opportunities, but only for the most discerning and picky investors,” it said in a post on X. 

The war with Iran is now entering its eighth month, straining global energy supplies amid a choked Strait of Hormuz. U.S. President Donald Trump rejected a peace proposal from Iran over the weekend, arguing that the Middle Eastern country was seeking a deal to reopen the waterway because it was under heavy pressure.

Earlier on Monday, Axios reported that as per certain U.S. officials,  President Trump was willing to offer Iran sanctions relief and release Iranian frozen funds in return for concrete steps regarding its nuclear program. 

However, Trump refuted the claims in a post on Truth Social, saying that it was “untrue” and that he “offered them NOTHING!”

Meanwhile, AI concerns heightened market tensions after OpenAI halted training of new models and also canceled the release of its upcoming artificial intelligence model, GPT-6.1 Astra, after internal testing revealed significant safety and alignment failures, according to The Wall Street Journal.

Chip stocks, including Micron Technology Inc. (MU) and Advanced Micro Devices Inc. (AMD) slumped at the close on Monday and continued to decline in the overnight session. 

Markets will be watching for the September reading on U.S. consumer confidence on Tuesday, alongside August jobs report and labor turnover survey. Federal Reserve officials including Michelle Bowman, Austan Goolsbee, and John Williams are also set to speak on Tuesday.

Trending Stocks To Watch 

Kodiak Sciences Inc. (KOD): Shares soared nearly 178% at close Monday, breaking into September’s top five biotech gainers after two experimental drugs, Zenkuda and KSI-501, met the primary endpoints in its Phase 3 Daybreak trial.

Summit Therapeutics Inc. (SMMT): Shares of the cancer-drug developer soared nearly 20% in the overnight session late Monday after AstraZeneca said it would put $2 billion into the company. 

Cleveland-Cliffs Inc. (CLF): The company’s stock fell nearly 8% at close on Monday after reports emerged claiming that it is idling some production at its Hamilton, Ontario plant in ​Canada and will also lay off hundreds ‌of workers due to damage done by U.S. tariffs. 

Viking Therapeutics Inc. (VKTX): Another pharma company was on the retail radar after its shares slumped more than 7% at close on Monday and continued to decline overnight amid the completion of its stock and convertible-note offerings, which raised nearly $548 million in net proceeds.

Other Market Trends 

Oil prices continued to climb. At the time of writing, Brent crude futures expiring in November were trading at $106.64 a barrel, while WTI crude futures expiring in November traded at $93.76 per barrel.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) traded lower at the time of writing, with sentiment in green. 

The iShares 20+ Year Treasury Bond ETF (TLT) was down 0.11% amid ‘bullish’ sentiment. 

Asian markets opened mixed on Tuesday. South Korea's KOSPI, Japan’s Nikkei 225, and China’s SSE Composite were trading in the red at the time of writing, while Australian stocks climbed at the open. 

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