Stocks Mixed As Oil, Banks Boost Dow, Treasury Yield Surge Clips Tech

A three-year high for oil prices has the Dow trading higher Monday, but rising Treasury yields, and a looming global power crisis, are holding down broader gains on Wall Street.

U.S. stocks traded mixed Monday, with gains for the Dow largely driven by oil and energy stocks, as investors look to navigate a potentially tricky week on Wall Street amid political risks, a looming global power crisis and a key debate on the nation's debt ceiling.

Oil prices jumped to the highest in three years in overnight trading as a rolling power crisis in China, linked to tighter emissions standards and lack of coal, triggered factory shutdowns in the industrial northeast. In Europe, natural gas prices have risen 500% over the past year and in Britain, the vast majority of commercial gas stations have run dry amid panic-buying linked to a shortage of drivers and hauliers.

The price boost has added upward pressure on domestic gasoline prices, as well, with the national average poised to test the highest levels of the year this week after closing out Friday at around $3.20 per gallon.

As OPEC+ Output and Oil Demand Shift, Traders Turn to Micro Futures

WTI futures for November delivery traded $1.39 higher from Friday's close to start the week at $75.37 per barrel. Brent contracts for the same month, the global pricing benchmark, were up $1.38 at $79.47 per barrel, the highest in three years.

In the U.S., House Speaker Nancy Pelosi has set a Thursday date for a floor vote on the $1 trillion bipartisan infrastructure bill, which she had claimed would only happen if she had the numbers to pass it, while Senate lawmakers will grapple with legislation aimed at both avoiding a government shut-down and lifting the $28.4 trillion debt ceiling.

On Wall Street, the Dow Jones Industrial Average booked a 145 point mid-day gain, largely on the back of energy and financial stocks, while the S&P 500 slipped 7.5 points.

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The Nasdaq Composite fell 80 points, however, as higher Treasury bond yields, as well as additional pressures on semiconductor supplies linked to China's power crisis, holds back early Monday gains.

Benchmark 10-year Treasury note yields traded at a 3-month high of 1.51% heading into the start of the session, before easing to 1.48%, with tomorrow's $60 billion sale of 2-year notes -- which settle on the debt ceiling deadline of September 30 -- firmly in focus.

Last this week, Federal Reserve Chairman Jerome Powell, as well as Treasury Secretary Janet Yellen, will face Congressional lawmakers Tuesday to take questions on the economic aspect of the government's COVID 19 response, with investors likely focused on comments related to both the looming debt ceiling and the Fed's tapering path.

Micron Technology  (MU) - Get Micron Technology, Inc. (MU) Report will publish earnings for its fiscal fourth quarter after the bell Tuesday, with analysts looking for a bottom line of $2.33 per share on revenues of $8.224 billion. Shares bumped 1.4% higher in mid-day trading to change hands at $75.09 each.

Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report and Chevron Corp  (CVX) - Get Chevron Corporation Report were notable early movers, rising 3.33% and 2.6% respectively, as oil prices passed the $75 per barrel mark.

Raythen  (RTX) - Get Raytheon Technologies Corp Report shares were also in focus, and rising 0.5%, even after the aerospace and defense group lost a $2.6 billion Air Force contract to British rival Rolls-Royce.

In overseas markets, German stocks rose 0.55% in Frankfurt, keeping the region-wide Stoxx 600 from slipping into negative territory, after Sunday's elections indicated little chance of a left-leaning coalition government leading Europe's largest economy.

Germany's Social Democrats, a center-left party headed by Olaf Scholz, won 25.7% of the vote, topping the 24.1% gained by former Chancellor Angela Merkel's conservative CDU/CSU bloc. Scholz, 63, will now begin talks with Germany's Green Party, as well as the Liberals, in order to form a government that could hold more than 50% of the seats in the Bundestag, Germany's parliament.