04:51 PM EDT, 04/15/2024 (MT Newswires) -- US benchmark equity indexes fell Monday as geopolitical risks weighed on investor sentiment, while a stronger-than-expected retail sales report added to signs that the Federal Reserve may stay on pause for longer than previously expected.

The Nasdaq Composite declined 1.8% to 15,885, while the S&P 500 dropped 1.2% to 5,061.8. The Dow Jones Industrial Average slid 0.7% to 37,735.1. All sectors closed lower, led by technology and real estate.

Iran launched an air attack against Israel over the weekend, though it caused only modest damage in Israel with no deaths, Reuters reported.

"The current increase in geopolitical risk brought about by hostilities that have increased in the Middle East over the weekend are likely to serve as a negative overhang for the market to consider until diplomacy can make progress to avoid further hostilities," Oppenheimer Asset Management said in a Monday note.

The US 10-year yield jumped 11.7 basis points to 4.62%, while the two-year rate added 3.8 basis points to 4.92%.

In economic news, US retail sales increased 0.7% in March following February's upwardly revised 0.9% gain. Analysts were modeling for a 0.4% increase, according to a consensus survey compiled by Bloomberg.

"Remarkably strong retail sales numbers for March contradict somewhat weaker survey and credit card spending evidence, but with jobs, inflation and activity all beating expectations the (Fed) is in no position to carry through with interest rate cuts anytime soon," ING said in a note.

US homebuilder confidence held steady this month as mortgage rates lingered at elevated levels and pushed some homebuyers back to the sidelines, according to National Association of Home Builders and Wells Fargo data.

"April's flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed," NAHB Chief Economist Robert Dietz said.

New York manufacturing activity improved less than expected into shallower contraction territory this month as shipments declined sharply, the New York Fed said.

West Texas Intermediate crude oil fell 0.1% to $85.59 per barrel Monday. "We don't expect an immediate reaction in crude oil prices given ample spare capacity and an already-elevated geopolitical risk premium," Australia and New Zealand Banking Group said in a note.

In company news, Salesforce (CRM) is in discussions to acquire Informatica (INFA), news outlets reported, citing unnamed sources. Salesforce shares fell 7.3%, the steepest decline on the S&P 500 and the Dow, while Informatica sank 6.5%.

Tesla (TSLA) shares fell 5.6%, among the steepest drops on the S&P 500 and the Nasdaq, after various media outlets reported that the electric vehicle maker has told employees in an internal e-mail that it plans to lay off more than 10% of its global workforce.

M&T Bank (MTB) was the top gainer on the S&P 500, up 4.7%, after the lender lifted its net interest income outlook for the full year in anticipation of the Fed executing fewer interest rate cuts. The company's first-quarter results declined year over year.

Gold increased 1.2% to $2,401.40 per troy ounce, while silver jumped 2.2% to $28.95 per ounce.