01:32 PM EDT, 04/01/2024 (MT Newswires) -- US benchmark stock indexes fell by Monday afternoon as government bond yields surged following an expansionary signal from a closely monitored manufacturing gauge.

The S&P 500 fell 0.4% to 5,236.1 but remained close to its record high, 5,261.1. The Nasdaq Composite declined 0.1% to 16,360.2. The Dow Jones Industrial Average at 39,546.5 was down 0.7% but still trading close to the record 40,000 mark. Real estate and health care led the decliners, while communications services and energy posted the only gains.

The US Treasury 10-year yield jumped 13.5 basis points to 4.33%, and the two-year rate rose 9.1 basis points to 4.71%.

In economic news, the Institute for Supply Management's US manufacturing index rose to 50.3 in March from 47.8 in February, compared with expectations for 48.4 in a survey compiled by Bloomberg. A reading above 50 indicates expansion. The S&P Global US manufacturing index for March was revised to 51.9 from the flash 52.5, compared with expectations for no revision in a survey compiled by Bloomberg.

Meanwhile, US construction spending fell 0.3% in February, compared with a 0.7% increase expected in a survey compiled by Bloomberg and following a 0.2% decrease in January.

On March 29, when markets were closed to observe Good Friday, government data showed growth in personal consumption expenditure deflator and core PCE slowed in February month over month. While year-over-year PCE growth increased, the core measure that the Fed pays particular attention to decelerated from a year earlier.

Last week, Fed Chairman Jerome Powell said that the Federal Open Market Committee will be careful in deciding when to lower rates, saying it would not be appropriate until the FOMC sees "more good inflation readings" and the FOMC "will be careful about this decision because we can be." The calendar of appearances by Fed officials is full this week with a speech by Powell on Wednesday the main event.

In company news, 3M ( MMM ) said Monday its multibillion-dollar settlement to address water pollution claims by public suppliers across the US received final court approval on Friday, and the company completed its spinoff of the Solventum (SOLV) health-care business. Shares of 3M ( MMM ) jumped 5%, the top gainer on the Dow.

West Texas Intermediate crude oil advanced 1.1% to $84.04 a barrel.

Gold was up 0.9% to $2,259.3 per troy ounce, and silver was up 0.8% to $25.11.