US stocks rolled over on Monday as earlier session gains evaporated and bond yields rose.

The S&P 500 (^GSPC) broke below the 5,100 level and ended the session down 1.2%. The broader benchmark has declined 2.6% in the last two sessions, marking its biggest drop in more than a year.

The Dow Jones Industrial Average (^DJI) lost 0.7%. The Nasdaq Composite (^IXIC) fell 1.8% as technology and consumer discretionary stocks led the declines.

The 10-year Treasury yield (^TNX) rose to 2024 highs, last sitting around 4.64%, as traders scaled back bets on the depth of Fed interest rate cuts this year.

All but a handful of stocks on the Nasdaq 100 (^NDX) ended the session lower. Tesla (TSLA) shares lost roughly 5% after an internal memo confirmed staff cuts at the electric vehicle maker. Salesforce (CRM) also declined after a report that the cloud giant may buy software provider Informatica (INFA).

Monday’s losses extended last week’s declines amid speculation that the Federal Reserve could delay or reduce the number of rate cuts expected this year, and traders assessed escalating tensions in the Middle East.

Stocks hit a bump in the road as geopolitical concerns have gripped markets. But one key to the market rally, resilient economic growth, continued to show signs of optimism on Monday.

Retail sales for March increased 0.7% from the previous month, according to Census Bureau data. Economists had expected a 0.4% increase in spending, according to Bloomberg data. Meanwhile retail sales in February were revised up to an increase of 0.9% from a prior reading of 0.6%.

This is the second consecutive monthly uptick in retail sales, suggesting January's surprise 1.1% decrease was more an aberration than a trend. It sent GDP projections higher too, with the Atlanta Fed's GDP Now tool forecasting 2.8% growth for the first quarter, up from 2.4% previously.

"The strong rise in retail sales in March and upward revision to February’s data will further support the Fed’s stance that there is no rush to start lowering interest rates," Capital Economics deputy chief US economist Andrew Hunter wrote in a note to clients on Monday.

The data reiterates that consumers continued to spend despite a higher interest rate environment, and Bank of America Institute recently offered a reason why that might be. Workers across all income cohorts are seeing their highest wage increases since early 2023.

"The solid labor market continues to sustain consumer momentum," the BofA Institute wrote on April 10. "March saw strong jobs growth, and this appears to be reflected in strengthening after-tax wages and salaries growth in our data — with growth at the highest level since early 2023."

Oil futures pared earlier losses as traders anticipated an Israeli response to Iran's attack over the weekend.

West Texas Intermediate crude futures (CL=F) settled at $85.41 per barrel, while Brent futures (BZ=F) sat above $90.10 per barrel.

Oil had fallen more than 1% earlier in the session as concerns of a broader war in the Middle East eased following Iran's direct missile and drone strike on Israel on Saturday. The well-telegraphed attack allowed damage to be contained.

"The question now is, does Israel launch a counterattack of escalation, or do they retaliate in a show of force that again does little damage? I see the second occurrence most likely in that it's more about saving face than actual damage," Dennis Kissler, senior vice president at BOK Financial, said on Monday.

It's estimated that Iran produces roughly 3 million barrels of oil per day. Any interruption to that flow could send crude prices higher.

"An Israeli attack on oil production or export facilities in Iran would drive the price of Brent crude oil to $100-$105," Andy Lipow, president of Lipow Oil Associates, said in a note on Sunday evening.

Salesforce (CRM)

Salesforce was the No. 1 trending ticker on Monday after a Wall Street Journal report said the cloud company is in talks to buy software provider Informatica. A reported deal could be reached as early as t week. The agreement would be one of Salesforce's largest acquisitions.

Tesla (TSLA)

Shares of Tesla sank more than 4% on Monday after an internal memo confirmed a staff reduction at the electric vehicle maker. The move comes amid an EV growth slowdown.

Trump Media (DJT)

Trump Media & Technology Group (DJT) stock slid as much as 18% on Monday after the parent company of Donald Trump's social media platform Truth Social filed to issue more than 21 million shares.

Stocks erased earlier session gains on Monday as bond yields climbed.

The S&P 500 (^GSPC) fell as much as 1% while the Dow Jones Industrial Average (^DJI) dropped below the flatline as both averages erased earlier gains. The tech-heavy Nasdaq Composite (^IXIC) fell more than 1% after opening the session higher.

The 10-year Treasury yield (^TNX) rose to 4.63% as traders have scaled back bets on the depth of Fed interest rate cuts this year. Interest rate-sensitive stocks led the losses, which accelerated at around 1:30 p.m. ET.

The S&P 500 Real Estate Sector ETF (XLRE) fell more than 1.5% while Technology (XLK) and Consumer Discretionary (XLY) stocks also fell.

Yahoo Finance's Dan Howley reports:

Global shipments of Apple’s (AAPL) iPhone fell nearly 10% in the first quarter despite a broader smartphone market recovery as the company continues to contend with rising challengers from China such as Xiaomi.

According to market intelligence firm IDC, Apple’s Q1 shipments fell 9.6% year over year from 55.4 million units in the first quarter of 2023 to 50.1 million units in Q1 this year. The company’s overall global market share also slipped from 20.7% to 17.3%.

Shares of Apple were off by less than 1% Monday. The stock is down about 5% year-to-date.

Read more here:

Tesla (TSLA) shares sank more than 2% on Monday after an internal memo confirmed a staff reduction at the electric vehicle maker. The move comes amid an EV growth slowdown.

Yahoo Finance's Pras Subramanian reports:

Tesla has announced a large reduction in staff on the heels of a disappointing Q1 delivery report, following in the footsteps of legacy automakers and pure-play EV makers, per an internal memo.

As first reported by EV blog Electrek, CEO Elon Musk emailed staff confirming a "more than 10%" headcount reduction following prior reports that layoffs could hit as much as 20% of staff.

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk wrote in the memo. “As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done.”

Read more here.

Reddit (RDDT) has seen fairly consistent selling since the opening bell after the Street came out with their coverage initiations post-IPO.

It's an interesting response by the market. Sure, some of the notes point to the potential for stalled user growth in the near term.

But getting overlooked, perhaps, are several clear bullish aspects of the Reddit investment thesis.

Deutsche Bank's initiation highlights them:

"We initiate on Reddit, Inc. with a buy rating and a $50 target price. We think Reddit is on the early end of a number of positive inflections: Top-of-funnel growth is accelerating, the ad platform is in the early stages of being built to address lower funnel objectives, the data licensing business is in the very early stages of growth, and the company is entering a harvest period in costs after aggressively adding to headcount over the last couple years. So in sum, we have an accelerative user growth profile, upside potential from ad-tech and, therefore, average revenue per user improvements, best-in-class margin expansion (admittedly off a low base), and high margin incremental revenue from data licensing sales."

Homebuilder stocks fell on Monday after a closely watched housing sentiment index broke a four-month streak of gains amid high mortgage rates.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) stayed at 51 in April, unchanged from March. To be sure, any number over 50 indicates that more builders view conditions as good than poor.

“April’s flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed,” NAHB chief economist Robert Dietz said in a statement.

Lennar (LEN), Pulte (PHM), and Toll Brothers (TOL) were all down more than 1% mid-morning, while the SPDR S&P Homebuilders ETF (XHB) was off 0.3%.

The flat confidence level among builders underscores how many prospective buyers and sellers, already dealing with high home prices and limited housing stock, are staying put. It comes after a higher-than-expected inflation print last week prompted investors to scale back the number of rate cuts they see this year to two, less than the median of three projected by the Fed at its March meeting.

“With the markets now adjusting to rates being somewhat higher due to recent inflation readings, we still anticipate the Federal Reserve will announce future rate cuts later this year and that mortgage rates will moderate in the second half of 2024,” Dietz said.

Mortgage rates have stayed slightly higher compared to the beginning of the year, pushing borrowers to the sidelines just as the spring homebuying season kicks into gear. The average rate on the 30-year fixed mortgage rate rose to 6.88%, higher than 6.82% the previous week, Freddie Mac reported.

In April, builders pulled back slightly on cutting home prices, with 22% of builders reporting doing so, down from 24% in March and 36% in December last year.

Meanwhile, the use of sales incentives ticked down to 57% in April from a reading of 60% in March.

Financial stocks (XLF) rose on Monday, led by shares of Goldman Sachs (GS).

Yahoo Finance's David Hollerith reports:

Profits at Goldman Sachs rose 28% in the first quarter as investment banking revenues surged, giving CEO David Solomon some needed momentum at the start of 2024.

Net income was $4.1 billion, beating analyst expectations. Its revenues of $14.2 billion also surged from a year ago, thanks in part to a 32% rise in investment banking fees. Asset and wealth management revenues jumped, as did trading.

Goldman's stock rose as much as 5% in early trading Monday before paring some of those gains.

Read more here.

Shares of Trump Media & Technology Group (DJT) slid as much as 15% after the parent company of Donald Trump's social media platform Truth Social filed to exercise warrants that could result in the issuance of almost 21.5 million shares of common stock.

Monday's slide was an extension of last week's sell-off that came after an updated regulatory filing from the company. It showed Trump Media taking on heavy losses and facing "greater risks" associated with the former president's ties to the platform.

Trump Media went public on the Nasdaq in late March after merging with special purpose acquisition company Digital World Acquisition Corp.

The stock rose as high as $66 per share on its first day of trading. On Monday, the shares were hovering just above $27 apiece.

Stocks rose on Monday amid easing concerns over the fallout from Iran's attack on Israel over the weekend. Investors turned their focus on earnings season as Goldman Sachs (GS) shares rose more than 5% after the bank’s first quarter profit jumped to beat estimates.

The S&P 500 (^GSPC) added roughly 0.8%, while the Dow Jones Industrial Average (^DJI) moved up about 0.8% after ending the week with sharp losses. The tech-heavy Nasdaq Composite (^IXIC) rose 0.9%.

Oil prices fell about 1% following Iran's airstrike, signaling easing concerns of any supply disruption. West Texas Intermediate crude futures (CL=F) were trading around $85 a barrel, while Brent futures (BZ=F) neared the $90 mark.

Retail sales increased 0.7% in March, higher than a 0.4% month-over-month increase expected by economists.

Several reports have surfaced that Salesforce (CRM) is nearing a deal to buy data management company Informatica (INFA) for $11 billion or so — hence both tickers are topping the Yahoo Finance 'Trending Ticker' page this morning.

Salesforce shares are down on the news as the vibe on the Street is that it's unclear if the business would be an amazing fit (it has lower margins than Salesforce, for one).

The Street has also liked a Salesforce more focused on growing profit margins the past year after dealing with a surprise activist investor attack (in part because of a string of dilutive acquisitions). This would be Salesforce's first big deal since buying Slack in 2021 for $28 billion.

Informatica's stock is lower as Salesforce may not offer a premium for the company, per reports.

Knowing Salesforce co-founder and CEO Marc Benioff, I am surprised a bit by the potential return to dealmaking. He has told me several times in recent months that Salesforce remains focused on growing profit margins — in fact, the company disbanded its M&A team last year!

Nonetheless, Benioff loves doing big deals, and the company has the cash to do them. So why not?

Citigroup (C) is opening "upside catalyst watches" on shares of Nvidia (NVDA) and Intel (INTC) after the chipmakers' stocks sank in the past month.

On Nvidia:

On Intel:

Further analysis: In the Sunday Morning Brief newsletter, I took a slightly contrarian view of Nvidia's stock price action. More on that here.

While markets are handling the weekend news of Iran's strike on Israel in their stride, it's important to keep on connecting the dots on these geopolitical risks.

Specifically, as it pertains to oil, which Citi thinks could now hit $100 a barrel.

I liked the dot-connecting the Deutsche Bank team did on the oil front this morning: