US stocks rise and bond yields drop after the UK government walks back part of its tax cut plan

• US stocks moved higher on Monday after the UK government walked back part of its tax cut proposal.
• Bond yields fell considerably, with the US 10-Year Treasury yield dropping 15 basis points to 3.68%.
• Oil prices surged 5% as OPEC considers cutting daily production by more than 1 million barrels.

US stocks surged on Monday after the UK government walked back part of its controversial tax cut plan that sparked a steep decline in the British pound last month.

UK finance minister Kwasi Kwarteng confirmed reports that the newly installed government, under Prime Minister Liz Truss, would abandon its planned tax cuts for the rich. Investors had grown increasingly worried about the fiscal impact of the tax cuts and its potential impacts on already elevated inflation.

"The first major U-turn within the first month of rule isn't exactly an encouraging start for Liz Truss' government," City Index analyst Fiona Cincotta said. "The move could potentially limit gains in sterling as the market frets over the government's ability to ride this storm out in a coherent manner."

The about-face by the UK government led to a rebound in the British pound relative to the US dollar and led to falling bond yields, both in the UK and in the US, which has been supportive for risk asset prices.

Here's where US indexes stood shortly after the 9:30 a.m. ET open on Monday:

• S&P 500: 3,618.19, up 0.91%
• Dow Jones Industrial Average: 29,024.56, up 1.04% (299.05 points)
• Nasdaq Composite: 10,627.29, up 0.49%

Here's what else is happening this morning:

• Oil prices jumped more than 5% as OPEC considers cutting its production output by more than 1 million barrels per day.
• The International Energy Agency warned that Europe needs to reduce its use of natural gas this winter to preserve its inventory as Russia could completely cut off supplies.
• Credit Suisse stock fell as much as 11% on Monday before paring nearly all of those losses after concerns mounted over the weekend that the bank was under considerable financial stress that's comparable to the 2008 implosion of Lehman Brothers.
• Kim Kardashian agreed to pay the SEC $1.3 million over undisclosed Instagram posts that touted a cryptocurrency in June 2021.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil jumped 5.93% to $84.20 per barrel. Brent crude, oil's international benchmark, rose 5.25% to $89.61.
• Gold rallied 0.43% to $1,677.50 per ounce.
• The yield on the 10-year Treasury fell 14 basis points to 3.69%.
• Bitcoin rose 0.43% to $19,248, while ether jumped 1.25% to $1,308.