01:47 PM EDT, 06/03/2024 (MT Newswires) -- US equity indexes fell as government bond yields slid after deteriorating activity and rebounding price pressure in a closely monitored manufacturing gauge sank crude oil.

The Nasdaq Composite dropped 0.5% to 16,649.2, erasing earlier gains as an intraday move higher in technology evaporated after midday on Monday. The S&P 500 fell 0.4% to 5,257.2, and the Dow Jones Industrial Average retreated 0.8% to 38,378.9, extending declines from earlier in the session. Health care was leading the gainers intraday. Energy was the steepest decliner, followed by industrials and utilities.

West Texas Intermediate crude oil sank 3.7% to $74.12 a barrel even as OPEC+ rolled, over the weekend, voluntary production cuts of 2.2 million barrels per day into the typical high-demand Q3.

In economic news Monday, the Institute for Supply Management's US manufacturing index fell to 48.7 in May from 49.2 in April, compared with expectations for 49.6 in a survey compiled by Bloomberg.

The prices paid index fell to 57 from 60.9, the highest reading since June 2022, according to a note from Jefferies. This is the 5th straight reading above 50 after 13 contractions in the prior 15 months.

"Input price pressure has started to rebound, but manufacturers' ability to pass on increases in goods prices is limited, according to recent anecdotal reports, such as the Fed's Beige Book," Thomas Simons, US Economist at Jefferies, said.

Meanwhile, US home prices cooled for the second consecutive month in April amid softening purchase demand and improving inventory deficits, a report by Intercontinental Exchange (ICE) showed. Annually, home price growth eased to 5.1% in April from a revised 5.7% the previous month and 6.1% in February, according to the report.

US construction spending fell 0.1% in April, compared with a 0.2% increase expected in a survey compiled by Bloomberg and an unrevised 0.2% decrease in March.

The US Dollar index declined 0.4% to 104.22.

The US 10-year Treasury yield plunged 10.8 basis points to 4.4%, and the two-year yield slumped seven basis points to 4.82%.

While historically an arguably reliable predictor of weakness, given the unprecedented policy intervention in market fundamentals, the yield curve and the longest stretch on record of its inversion may no longer hold the predictive power it once did, Lindsey Piegza, chief economist at Stifel, said in a note.

In company news, Paramount Global ( PARAA ) and Skydance have agreed to terms of a merger that the duo will likely announce in the coming days, CNBC's David Faber reported Monday. Shares of Paramount jumped 8.1% intraday, the top performer on the S&P 500.

Autodesk ( ADSK ) released preliminary fiscal Q1 results above market estimates while naming a new interim finance chief and said it won't restate previous financial statements following a probe of its accounting practices. Shares advanced 4% intraday, the second-biggest gainer on the S&P 500.

Gold advanced 1% to $2,369.30 an ounce, and silver rose 1.1% to $30.79.