Rising Treasury yields and geopolitical instability in the Middle East pressure US equities, with investors bracing for key earnings from KB Home and Costco amid looming trade talks between the US and China.
S&P 500 year-end target cut to 7,900 from 8,400 by Yardeni Research as 10-year yield hits 5%.
Brent crude near $104, up 13% in a month, with added geopolitical risk from missile attack on Riyadh.
Dow Jones fell over 1.5% last week amid rising Treasury yields and geopolitical tensions.
Costco reports Thursday with an analyst warning core earnings could miss forecasts.
KB Home reports Tuesday with mortgage rates tracking the 10-year yield, likely pressuring the homebuilder.
Wall Street faces a volatile week as the 10-year Treasury yield hits 5%, prompting Yardeni Research to slash its S&P 500 year-end target to 7,900. Geopolitical tensions escalate following a missile strike on Riyadh, pushing Brent crude toward $104 and complicating the Federal Reserve's inflation fight.
A 5% risk-free return on government bonds forces investors to demand higher earnings yields from stocks, often leading to valuation compression, particularly in growth-heavy sectors like technology.