Stocks fell on Monday alongside jumps in both bond yields and the price of oil as geopolitical upheaval remained front and center for traders.

The S&P 500 fell 0.5% and the Nasdaq Composite dropped 0.6% as oil prices staged a 3% rally, pushing Brent crude oil to nearly $108 per barrel.

The level would be the highest for Brent, the European benchmark, since Sept. 15. U.S. crude oil also rose to almost $96.

Oil’s renewed rise was briefly halted earlier Monday after reports said that mediators planned to meet with U.S. and Iranian officials separately to discuss the ongoing stalemate between the two sides over the war with Iran. Iran’s semi-official ISNA news agency downplayed the significance of the meetings, saying that Iran’s foreign minister, Abbas Araghchi, would attend talks with mediators, but said no U.S. representatives would be present.

Over the weekend, President Donald Trump said he had rejected a recent proposal from Iran to reopen the Strait of Hormuz, through which critical energy supplies flowed before the war.

“They want to make a deal, and I think that’s fine,” Trump told reporters in Washington. “I like making a deal too, but … that deal would not be acceptable.”

The momentary pause in oil’s rise, a familiar feature of this year’s turbulent markets, was short-lived.

Bond yields surged to fresh multi-year highs.

By mid-morning, the 10-year U.S. Treasury yield had risen to 5.27%, its highest level since mid-June 2007. A wide swath of other Treasurys also continued to trade above 5%, and the yield on the 30-year bond hit its highest level since May 2004.

The 2-year Treasury, which is often viewed as a signal of where the market expects central bank rates to go, reached its highest level since 2024.

Market watchers’ anxiety has grown alongside the rise in bond yields.

“The significant increase in oil prices so far this year hasn’t knocked the wind out of the global economy’s sails,” longtime market analyst Ed Yardeni wrote Saturday. “The question is whether rapidly rising interest rates will do so.”

“Unfortunately, these higher rates also exacerbate the outlook for large government deficits worldwide,” wrote Yardeni, president of Yardeni Research.

Still, stocks have largely remained resilient in the face of rising inflation from higher oil prices and bond yields that keep shooting higher.

Part of the reason why “is that financial conditions have changed little” since January, said analysts at Goldman Sachs. They added that “the substantial rise in interest rates has been nearly offset by the effects of higher equity prices.”

But the equity market’s rise this year has been driven primarily by just a few sectors, which troubles some analysts.

For the year so far, the S&P 500 has risen a little more than 12%. But a look under the hood reveals a different story. The information technology sector has gained 28% this year and the energy sector has added 38%.

The financial, real estate, utilities, consumer staples, consumer discretionary and communication services sectors have all gained less than 10%.

The health care, industrials and materials sectors are up 10%.

On top of higher oil prices, rising bond yields and geopolitical headlines that could swing stocks in either direction at a moment’s notice, the end of the month features prominent central bank meetings, including at the Federal Reserve, where rates could rise further.