NEW YORK (Reuters) – The S&P 500 dipped on Monday, as fuel demand worries during a resurgent pandemic sent energy stocks lower but rising U.S. Treasury yields lifted financial stocks, keeping Wall Street’s benchmark index near record levels.

A screen displays the Dow Jones Industrial average after trading closed at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 9, 2021. REUTERS/Andrew Kelly

Energy shares were the worst performing of the 11 major S&P sectors, down 1.48% along with crude prices as mounting coronavirus cases and the potential for restrictions, particularly in China, raised worries about the fuel demand outlook.

China reported more COVID-19 infections, while U.S. cases and hospitalizations were at a six-month high as the Delta variant spread.

Financial shares gained, buoyed by a climb in the 10-year U.S. Treasury yield back above 1.30% to its highest level since July 16 as a report on job openings showed further evidence of an improving labor market.

“In general, of the economically sensitive cyclicals, it is the interest-rate sensitives that are going to celebrate this normalization of yields, even if normal is 1.30% versus where we were a week ago, which was 1.12%. That is driving the action,” said Art Hogan, chief market strategist at National Securities in New York.

Investors will watch U.S. inflation readings this week for hints about the path of Federal Reserve policy. On Monday, Atlanta Fed president Raphael Bostic said the United States should be well past the pandemic crisis before the central bank raises rates. Richmond Fed President Tom Barkin said high inflation this year may have already met one of the Fed’s benchmarks for raising interest rates.

Later this month, a meeting of Fed leaders in Jackson Hole, Wyoming should provide insight into the central bank’s potential plan to begin tapering its bond purchases.

The Dow Jones Industrial Average fell 106.66 points, or 0.3%, to 35,101.85, the S&P 500 lost 4.17 points, or 0.09%, to 4,432.35 and the Nasdaq Composite added 24.42 points, or 0.16%, to 14,860.18.

A strong earnings season has helped U.S. stocks climb to record highs over the past two weeks, as several consensus-beating results from major firms reinforced belief in a post-COVID economic recovery.

As of Friday, analysts expected second-quarter profit growth of 93.1% for S&P 500 companies, according to IBES data from Refinitiv. Of the 443 companies in the index that have reported earnings so far, 87.4% beat analyst expectations, the highest on record.

Sanderson Farms Inc climbed 7.41% after it agreed to be bought for $4.53 billion by commodities trader Cargill Inc and investment firm Continental Grain Co at a time when meat prices have been soaring.

Tyson Foods Inc advanced 8.69% after the meat processing company raised its forecast for fiscal 2021 revenue.

Declining issues outnumbered advancing ones on the NYSE by a 1.63-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 83 new highs and 66 new lows.

Volume on U.S. exchanges was 8.55 billion shares, compared with the 9.64 billion average for the full session over the last 20 trading days.

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