NEW YORK — U.S. stocks slumped Monday after higher yields in the bond market caused by a strong U.S. economy cranked up the pressure on Wall Street.

The S&P 500 tumbled 1.2%, following up on its 1.6% loss from last week, which was its worst since October. The Dow Jones Industrial Average dropped 248 points, or 0.7%, and the Nasdaq composite slumped 1.8%.

Stocks had been solidly higher earlier in the day, as oil prices eased with hopes that international efforts to calm escalating tensions in the Middle East may help. But Treasury yields also spurted upward following the latest report on the U.S. economy to blow past expectations.

The economy and financial markets are in an awkward phase where such strength raises hopes for growing profits at companies but also hurts prospects for easier interest rates from the Federal Reserve. They’re the two main levers that set stock prices, and they’re simultaneously yanking Wall Street in different directions.

Traders want lower interest rates, which can give the overall economy a boost, and much of the U.S. stock market’s run to records recently was built on expectations for cuts.

But strong reports like Monday’s, which showed U.S. shoppers increased their spending at retailers last month by more than expected, have traders broadly forecasting just one or two cuts to rates this year, according to data from CME Group. That’s down from expectations for six or more cuts at the start of this year. Some traders are bracing for potentially no cuts because inflation and the overall economy have remained stubbornly above forecasts this year.

High interest rates and bond yields hurt prices for all kinds of investments, particularly those that look expensive or those that compete for the same kinds of investors as bonds do.

As a result, real-estate investment trusts fell to some of Monday’s sharpest losses in the stock market. When bonds are paying higher yields, they peel away investors who might otherwise be interested in the relatively big dividends that real-estate stocks pay. High rates can also pressure real estate prices broadly.

Office owner Boston Properties fell 3.2%, for example.

More influential was weakness for Big Tech stocks. Apple dropped 2.2%, Nvidia fell 2.5% and Microsoft sank 2%. They’ve been past beneficiaries of low interest rates and often feel pressure when yields are rising. Because they’re also the largest stocks on Wall Street, their movements carry extra weight on the S&P 500 and other indexes.