Dow Jones declines on geopolitical tensions, higher T-yields

Concerns about Middle Eastern geopolitical tensions have been coupled with high yields, which have caused further decline in the Dow Jones Index. In the early afternoon, the index is trading little higher after losing its early gains.

The market’s appetite for risk has increased following to Goldman Sachs’ better-than-expected quarterly earnings, but it soured as US Treasury yields increased in an immediate reaction to the strong US Retail Sales data.

The debate by Israel over possible retaliation against Iran is making investors more cautious, which is reducing their appetite for risk and driving down demand for stocks.

US retail sales numbers have above forecasts, demonstrating the robust momentum of the US economy. Although this is good for market sentiment, the implications for monetary policy dampen expectations of a Federal Reserve interest rate drop, which puts downward pressure on stocks.

With the NASDAQ leading losses with a 1.65% decrease to 15,912, the S&P 500 and the Dow Jones following with a 0.6% decline to 37,750, the majority of Wall Street indices have entered negative territory.

On Monday afternoon trading, most Wall Street sectors are down. Real estate is leading the losses with a 1.8% decrease, followed by technology with a 1.72% decline and communication services with a 1.63% decline. Leading the gains is United Health Group (UNH), up 1.51% to $445.75, and followed by Goldman Sachs, up 2.65% to $399.85. Salesforce falls 6.73 percent to $274.36 amid rumors that the software company is in talks to acquire Informatica.