Nasdaq Leads Losses as Rising Oil Prices and Borrowing Costs Weigh on Sentiment

By Sarah Chen | May 18, 2026

Wall Street kicked off the week on a cautious note Monday, with the Nasdaq Composite leading declines as rising oil prices and higher borrowing costs dampened risk appetite. The Nasdaq fell 0.9%. The S&P 500 dropped 0.5%. The Dow slipped 120 points.

The culprit was a fresh leg higher in oil prices. WTI crude climbed back above $94 a barrel as Middle East tensions showed no signs of easing. The move reignited concerns that higher energy costs could eat into corporate margins just as the second-quarter earnings season approaches.

Treasury yields also pressed higher, with the 10-year note reaching 4.35% — its highest level in three weeks. The move in yields was driven by comments from Federal Reserve Governor Lisa Cook, who said the committee needed “more evidence” that inflation was on a sustainable path toward 2% before cutting rates.

Higher rates and higher oil created a double headwind for growth stocks. Nvidia fell 2.1%. AMD dropped 1.8%. The ARK Innovation ETF, a bellwether for speculative growth, declined 2.4%.

Energy was the only sector in positive territory, with the XLE ETF gaining 0.6% as oil prices supported the group.