US stocks fall to head for worst monthly loss of 2023 as bond yields spike on Fed fears

• US stocks slid further on Thursday as bond yields continued to surge.
• All three indexes traded lower as investors braced for higher-for-longer interest rates.
• Meanwhile, the S&P 500 is on track to end September with its worst monthly performance in 2023. 

US stocks slid on Monday, extending last week's losses as investors remain spooked over rising bond yields and the prospect of higher for longer interest rates.

The drop to start the week comes amid an already dismal month for stocks, with the S&P 500 having shed around 4% so far in September. The benchmark index is now on track to notch its second-straight losing month and the worst monthly loss of 2023.

Investors have been on edge since the Federal Reserve last week warned that rates could be higher for longer, causing bond yields to spike. The 10-year Treasury yield hit its highest level since 2007 last week. The key bond yield surged again on Monday to 4.527%. Meanwhile, the two-year Treasury yield hit its highest level since 2006 last week, touching 5.129%.

"The market all year has wanted rate cuts and all it keeps getting are hikes," Sanctuary Wealth chief investment strategist Mary Ann Bartels said in a note on Monday. "The market wants to know when the Fed will stop raising rates, but we are not there yet."

Higher rates have also stoked fears of a coming recession. New York Fed economists are forecasting a 61% chance the US will tip into a downturn by August of next year.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Monday: 

• S&P 500: 4,308.29, down 0.28% 

• Dow Jones Industrial Average: 33,882.62, down 0.22% (-74.81 points)

• Nasdaq Composite: 13,154.53, down 0.43% 

Here's what else is going on today: 

• Markets can expect $100 a barrel to be the new normal for oil prices, JPMorgan warned.
• Oil prices inching closer to the $100 a barrel threshold is bad news for inflation, but good news for Russia.
• Warren Buffett's Berkshire Hathaway just dumped another $130 million of HP stock.
• US investors can't bet directly on the 2024 election, the Commodity Futures Trading Commission just ruled.
• The bloc of countries that wants to overthrow the US dollar is about to gain 6 new members.

In commodities, bonds, and crypto: 

• West Texas Intermediate crude oil rose 0.37% to $90.36 a barrel. Brent crude, the international benchmark, was up 0.4% to $93.64 a barrel. 
• Gold edged lower to $1,942.30. 
• The yield on the 10-year Treasury bond rose seven basis points to 4.515%. 
• Bitcoin slipped 1.77% to $26,126.