US stocks fall, bond yields rise as Middle East war drags on

Wall Street stocks saw a decline on Monday, with the S&P 500 closing 0.8% lower. This downturn came after President Donald Trump rejected Iran's offer of a seven-day truce. The ongoing conflict between the US and Iran continued to influence market sentiment, with oil prices rising, though crude finished below session highs due to traders' relief at Trump's signal for talks to continue.

Iran's foreign minister, Abbas Araghchi, was reportedly set to meet with Qatari mediators in New York on Monday, though no further talks were scheduled with the US. The geopolitical tension has caused yields to soar, raising concerns that the Federal Reserve may tighten monetary policy to curb inflation. European markets showed sluggishness, closing 0.1% lower in London and Frankfurt, while Paris remained flat.

Asia experienced mixed results as markets reacted to the extension of a trade truce between the US and China the previous week. European natural gas prices rose, and UK diesel prices hit a record high. Meanwhile, gold prices dropped from their summer highs as investors responded to the stronger dollar, making the metal more expensive for non-dollar buyers.