Stocks kick off week in the red, volatility moves higher

Stock market indices (^DJI, ^IXIC, ^GSPC) open Monday in the red to kick off the trading week. Materials lead sector gains this morning as sectors open mixed.

Yahoo Finance Senior Markets Reporter Jared Blikre monitors year-to-date trends in US Treasury yields and market volatility as equities prep for Tuesday's much anticipated Consumer Price Index (CPI).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JARED BLIKRE: Now, we're seeing a lot of red in the markets today. But NASDAQ is leading the way down, down about 45 basis points. A little bit less than half a percent.

And just checking in on the sector action, then we got to look at bonds in a second. Materials, staples, utilities are in the forefront, while tech is the biggest loser. And the only underperformer, by the way, coming off a nasty day Friday.

And I want to take a look at the bond market because CPI is the tail that Wags the dog here. This is a 10-year T note yield. Now, we have not seen it under pressure in any direction, either to the upside or to the downside over the last three months. And that is actually good for stocks, because bond volatility is good for stocks going up.

If you take a look at the MOVE index, bond volatility going down. That is good for stocks. Also, going to take a look at the US dollar index ahead of CPI. That is up about 12 basis points. And the US dollar has also been in this sideways trading range as well. So it's not been pressuring markets, either to one direction or the other.

And then we got to take a look at the VIX here. The VIX is a little bit elevated relative to the last three months. But check out the last two years here. And you can see well in the bottom end of its range.

Just want to point out that for tomorrow's CPI, one third of the price gains in the S&P 500 from these October lows all the way back here, all the way up, one third of those gains have been on CPI days. We just came off the last time a really bad print, a really bad reaction. So that could be a bellwether.

We're going to want to pay a lot of attention to this print tomorrow, guys.