Federal Reserve Chairman Jerome Powell’s comments calmed bond markets, but surging WTI crude oil prices above $100 per barrel pressured U.S. stocks and cryptocurrency valuations on Monday.

Key points

• WTI crude oil closed above $100 per barrel for the first time since 2022, rising 5.3% to nearly $105.
• Federal Reserve Chairman Jerome Powell signaled a willingness to look past energy-related price shocks, keeping interest rates steady for now.
• The U.S. 10-year Treasury yield dropped nine basis points to 4.35%, while the 2-year yield fell eight basis points to 3.83%.
• Market expectations for a Federal Reserve rate hike in 2026 plummeted from 25% to 5% following Powell's remarks.
• The Nasdaq and S&P 500 indices finished the trading session down 0.75% and 0.4%, respectively, as risk assets struggled.

The divergence between stabilizing bond yields and rising energy costs highlights the ongoing tension between central bank policy and geopolitical supply shocks. Investors remain cautious as high oil prices threaten to dampen economic growth and offset the positive sentiment generated by the Federal Reserve's dovish stance.