Stocks experienced a mixed performance on Monday as the benchmark 10-year Treasury yield briefly surpassed 5% before retreating, signaling that investors are coming to terms with the likelihood of higher interest rates in the long term. The Dow Jones Industrial Average (DJI) fell by 0.6% or nearly 200 points, while the S&P 500 (GSPC) saw a drop of almost 0.2%. In contrast, the Nasdaq Composite (IXIC) managed to rise by approximately 0.3%.

The ongoing sell-off in bonds, coupled with concerns about escalating tensions in the Middle East, have weighed on the market's performance, with investors anxiously awaiting the upcoming earnings season of Big Tech companies. The realization of elevated borrowing costs as the "new normal," following Federal Reserve Chair Jerome Powell's indication of the central bank's commitment to its strategy, has caused stocks to falter.

Having breached 5% at the start of the day, the 10-year Treasury yield (TNX) decreased to 4.84% by Monday's close. Simultaneously, the yield on the 30-year Treasury (TYX) also declined, settling just below 5%.

Against this backdrop, investors are preparing for significant data releases that will provide insights into the strength of the US economy. Later this week, the market will receive readings on third-quarter GDP and the Federal Reserve's preferred inflation gauge.

Chevron (CVX) experienced a 3% decline in pre-market trading after announcing its acquisition of smaller rival Hess (HES) for $53 billion in stock, which is seen as a strategic move to expand operations in Guyana. In other deal news, Roche has agreed to a $7.1 billion acquisition of Telavant, a bowel drugmaker owned by Pfizer (PFE) and Roivant Sciences (ROIV), with shares of the latter rising nearly 12%.

Notably, the Nasdaq Composite demonstrated strength throughout the trading day, while yields experienced downward momentum, leading to a mixed market performance.

Monday's trading session marked the lowest close for the benchmark S&P 500 since May 31.

Additionally, Arm (ARM) experienced a surge of over 7% in its stock price after reports emerged about a new partnership with leading AI firm Nvidia (NVDA). The partnership involves Nvidia's design of central processing units (CPUs) compatible with Microsoft's Windows system using Arm's technology. This foray into PC chips could potentially impact other players in the industry, such as Intel (INTC), as indicated by a more than 3% decline in Intel's stock following the news.

The 10-year Treasury yield demonstrated significant volatility on Monday, with the largest intraday reversal since March. After briefly surpassing 5%, it declined to 4.85% by the afternoon.

Some of the trending stocks on Monday included Okta (OKTA), which experienced a more than 9% decline amidst concerns raised by Wall Street analysts regarding the lingering impact of a recent security breach. Chevron (CVX) agreed to acquire Hess (HES) in an all-stock deal valued at $53 billion, leading to a 3% decline in Chevron's stock. On the other hand, shares of Alphabet (GOOGL) and Meta (META) saw gains in anticipation of upcoming big tech earnings, with Meta witnessing a more than 2% increase and Alphabet rising nearly 1.5%. Analysts will be closely monitoring the companies' earnings calls for updates on artificial intelligence.

Throughout the day, stocks reversed their early losses as yields declined, resulting in a positive performance. The Dow Jones Industrial Average was marginally in the green, while the S&P 500 rose by 0.4% and the Nasdaq Composite increased by nearly 1%.

It is worth noting that Mondays have been favorable for the market in 2023, with stocks rising for 15 consecutive Mondays. This marks the longest streak of Monday gains since at least 1952, contributing significantly to the year-to-date stock market gains of just over 10% for the S&P 500.

In morning trade, the shares of Stellantis (STLA) experienced a 1% increase.

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