Stock Market Today: Dow Slides, Nasdaq Dives As Yields Climb But ServiceNow, Other Software Names Gain

💡 The Dow Jones and Nasdaq composite indices fell sharply as yields rose, but ServiceNow and other software stocks bucked the trend.

The Dow Jones Industrial Average and Nasdaq composite indices suffered significant losses on Monday as yields on long-term bonds surged, pushing the benchmark 10-year Treasury yield to a new high. This hawkish shift in market sentiment was driven by concerns over rising inflation and a growing economy.

Despite the broad declines, a handful of software stocks managed to defy the trend and post strong gains. ServiceNow, a cloud-based software company, jumped 5.5% after reporting better-than-expected earnings and revenue growth.

Dow, Nasdaq Fall as Yields Rise

The Dow Jones Industrial Average fell 2.1% to 31,434.19, while the Nasdaq composite plummeted 3.1% to 12,144.51. The S&P 500 index also declined 2.3% to 3,934.52.

The sharp decline in stocks came as yields on long-term bonds rose to new highs. The 10-year Treasury yield surged to 4.8%, its highest level since October 2023, as investors repriced the timing of the first interest rate cut from March to June.

ServiceNow, Other Software Stocks Buck the Trend

ServiceNow was not the only software stock to post strong gains on Monday. Other names in the sector, including $CRM and $SHOP, also rose as investors sought out companies with strong growth prospects.

Market Volatility Remains High

The sharp decline in stocks on Monday was a reminder that market volatility remains high as investors grapple with inflation, interest rates, and economic growth. With the Fed signaling that interest rates will remain elevated for longer, stocks may continue to be subject to significant price swings.

What It Means for Investors