In afternoon trading on Monday, the Dow Jones Industrial Average experienced a slight decline, as Treasury yields eased. Meanwhile, renowned investor Bill Ackman made a significant move by covering his firm Pershing Square's bond short. Ackman cited rising economic concerns and stated, "The economy is slowing faster than recent data suggests."

The tech-heavy Nasdaq performed the best among the major indexes, showing a 0.8% increase as it aimed to recover from recent losses. Airbnb emerged as a top performer, rallying over 4%. The S&P 500 also made modest gains of 0.4%, with Nvidia ranking among the better performers, rising nearly 4%. However, it remained below its 50-day moving average.

Within the S&P 500 sectors, communication services and technology proved to be the strongest performers, while energy and materials faced challenges. The Russell 2000, representing small-cap stocks, experienced a fractional decline. On the other hand, growth stocks reversed their earlier downtrend, with the Innovator IBD 50 ETF gaining 0.3%.

The Dow Jones index struggled to sustain its rally as selling pressure intensified, resulting in a decline of approximately 0.5%. Walgreen Boots Alliance emerged as the top gainer, rising around 5% after receiving an upgrade from JPMorgan. However, the stock remained below its 200-day and 50-day moving averages.

Microsoft also experienced positive momentum ahead of its earnings report, with a gain of over 1% and further distancing itself from its 50-day moving average. Apple, its long-time competitor, registered a slight uptick. On the downside, Chevron, a major oil company, faced a significant setback, sliding nearly 4% following its announcement of a $53 billion all-stock deal to acquire Hess. Although the deal valued Hess stock at $171, it traded below $162.

Tesla, after enduring a tumultuous week that resulted in a 15.6% decline, made efforts to recover by gaining nearly 1% on Monday. The stock was on the verge of reclaiming its 200-day moving average, which held significant importance for its future performance. CEO Elon Musk expressed concerns about rising interest rates affecting consumers' ability to purchase new vehicles and acknowledged the "enormous challenges" surrounding the production of the much-anticipated Cybertruck. Citi warned of potential reputational risk, while Evercore ISI noted the company's second significant breach in two years, which may lead to downward revisions in fiscal 2024 estimates.

In other news, Okta stock experienced a sharp drop, falling nearly 9% following an 11.6% plunge on Friday. It currently trades below its 200-day moving average.

Outside of the Dow Jones, investors are urged to focus on building robust watchlists amidst the current market volatility. Light & Wonder showed potential for a flat-base entry at $79.06, demonstrating strong overall performance and ranking in the top 6% among stocks in terms of price performance over the past 12 months. Tradeweb Markets also exhibited promise, with its relative strength line reaching new highs as it approached a flat-base entry at $87.53. However, caution is advised as earnings are scheduled for release on Thursday.

Investor's Business Daily recommended using options as a strategy to reduce risk during earnings season, providing an opportunity to capitalize on the potential upside of stock movements while mitigating downside risk.