(Updates with index/price moves, macroeconomic data, and economists' comments.)

US equity indexes rose, with the Nasdaq Composite hitting an all-time high, while government bond yields surged to the highest in more than two decades.

The Nasdaq Composite advanced 1.1% to 27,477.31, after hitting an all-time high earlier in the session. The S&P 500 climbed 0.7% to 7,773.95, and the Dow Jones Industrial Average rose 0.2% to 51,267.90. All sectors except one rose, with materials and communication services leading the gainers. Real estate declined.

The Institute for Supply Management's US services index fell to 54.9 in September from 55.4 in August, versus the 55.0 forecast in a Bloomberg-compiled survey. The ISM's reading indicates slower expansion. Regional services data were mixed.

Prices paid rose to 74.0 in the ISM data from 72.6, according to a Jefferies note. The February 2026 reading of 63.0 was the lowest since March 2025, but September's reading is the highest since mid-2022.

"The comments from [ISM] survey respondents reflected continued strong demand overall, but challenging financial conditions due to increased prices for fuel, shipping, and interest expenses," Jefferies Chief US Economist Thomas Simons said in the note.

Tanker rates are at a historic high, with chartering an oil tanker from the Persian Gulf to China costing more than $1.2 million a day, contributing to the rise in oil costs, a Stifel Securities note cited data compiled by Bloomberg.

Oil prices remain elevated despite traffic through the Strait of Hormuz picking up and global supply improving, Stifel's Chief Economist Lindsey Piegza said in a note. "In the near term, lingering issues surrounding shipping and insurance costs, rerouting delays, and ship availability continue to contribute to higher energy costs."

The S&P Global US services index rose to 58.8 in September from a 58.7 flash reading, up from the 56.5 reported in August, compared with expectations for no revision in a survey compiled by Bloomberg. The September index is higher than the 56.5 reported in August.

US Treasury yields were mixed, with mid-to-long maturities outpacing shorter counterparts, steepening the yield curve. The 30-year rate rose 3.2 basis points to 5.66%, its highest since 2002. The 10-year yield climbed three basis points to 5.31%, its strongest level since 2002. The 2-year yield slipped less than one basis point to 4.82%.

Nevertheless, the probability of the Federal Reserve raising its target rate by 25 basis points in October stood at 24% late Monday, down from 71% a week earlier, according to the FedWatch tool. The remaining 76% likelihood is that rates will remain unchanged at the 3.75% to 4.00% range.

Saudi Arabia-backed Yemeni government forces advanced on Monday to retake the coast around the Bab el-Mandeb Strait, a chokepoint similar to the Strait of Hormuz, pushing the Iran-backed Houthis out of most of the areas they had seized in September, Reuters reported.

Meanwhile, Iran's Interior Minister Eskandar Momeni travelled to Doha at the invitation of his Qatari counterpart, Al Jazeera, a Middle Eastern broadcaster, reported. Momeni is scheduled to meet Interior Minister Sheikh Khalid bin Hamad bin Khalifa Al Thani during the official visit, the news outlet cited Iran's Tasnim news agency. Despite suffering repeated attacks after the US and Israel struck Iran, mediation efforts by Qatar are ongoing to restart talks between Tehran and Washington.

The front-month US West Texas Intermediate crude oil contract dropped 1.9% to $89.38 per barrel, and the global benchmark North Sea Brent declined 1.8% to $100.37 per barrel.

In company news, Schneider Electric plans to acquire PTC (PTC) in an all-cash deal valued at $23.7 billion, it said. PTC shares soared 33%, the S&P 500's top gainer.

C.H. Robinson Worldwide (CHRW) has agreed to acquire RXO (RXO) in a cash-and-stock deal valued at $5.8 billion, it said. C.H. Robinson shares slumped 11%, the steepest decline on the S&P 500.