US stocks rise as Treasury yields fall amid flight to safety and dovish Fed comments

• US stocks jumped on Monday and bond ETFs surged after a safety trade was sparked by Hamas attacking Israel.
• Oil prices, energy stocks, and defense stocks surged in the aftermath of the Middle East conflict.
• Comments from Federal Reserve members also signaled that further interest rate hikes may not be necessary.

US stocks jumped on Monday after a safety trade was sparked by Hamas attacking Israel over the weekend.

The bond market was closed on Monday, but Treasury yields look set to decline on Tuesday based on the price action of bond ETFs and futures contracts tied to the Treasury note. Traders expect a 14-basis-point decline in the 10-year yield, according to futures data from the CME.

Recent comments from Federal Reserve members also leaned dovish as they acknowledged the recent surge in long-term bond yields and suggested that further interest rate hikes may not be necessary.

Fed Vice Chair Philip Jefferson said in a speech to the National Association for Business Economics in Dallas on Monday that the Fed is "in a position to proceed carefully in assessing the extent of any additional policy firming that may be necessary."

"I would want the public to know that we're going to be mindful, whatever is happening, and we will use data in real time to pick an appropriate response," Jefferson said.

Fed officials Mary Daly and Lorie Logan also recently acknowledged that the recent surge in yields could limit future rate hikes.

Here's where US indexes stood shortly at the 4:00 p.m. closing bell on Monday:

• S&P 500: 4,335.66, up 0.63%

• Dow Jones Industrial Average: 33,604.65, up 0.59% (197.07 points)

• Nasdaq Composite: 13,484.24, up 0.39%

Here's what else is going on today:

• Israel's currency weakened to a seven-year low against the dollar on Monday, and the Bank of Israel announced it would sell up to $30 billion in foreign reserves.
• Here's what six Wall Street experts had to say about the breakout of war between Israel and Hamas and its potential impact markets going forward.
• The ongoing Treasury rout ranks as the deepest bond bear market in the 247-year history of the US, according to Bank of America.
• Defense stocks surged on Monday, with the share price of Northrop Grumman jumping as much as 12%. Meanwhile, General Dynamic and Lockheed Martin stock jumped 9% and 8%.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil rose 4.32% to $86.37 a barrel. Brent crude, the international benchmark, gained 4.20% to $88.13 a barrel.
• Gold jumped 1.70% to $1,876.60 per ounce.
• The bond market was closed on Monday. The 10-year Treasury yield closed at 4.80% on Friday and was indicated to decline 14 basis points based on futures contracts.
• Bitcoin fell 1.00% to $27,653.