U.S. stocks closed lower on Monday after an unexpected drop in retail sales reinforced signs of slowing economic momentum, while the dollar touched a two-month low against the euro and traders reduced bets on how aggressively the Federal Reserve may move in coming months. The Dow Jones Industrial Average fell 0.51%, the S&P 500 dropped 0.52% and the Nasdaq Composite lost 0.31%, with investors awaiting retail earnings from Home Depot, Walmart, Target and Lowe's for a clearer read on consumer health. Despite softer data, long-term Treasury yields rose, with the 10-year yield up 2.79 basis points to 4.724% and the 30-year yield up 4.43 basis points to 5.3103%, its highest since 2007, as worries over the U.S. fiscal outlook and AI-driven corporate debt supply outweighed growth concerns. Markets are now pricing a 35% chance of a Fed move in September, down from about 55% a week earlier, while the odds of a cut by December stand at 69%. The euro rose to $1.1579 and touched $1.1614, the highest since June 17, while oil jumped more than $2 on supply fears tied to the war with Iran and pressure on the Strait of Hormuz (a key Middle East oil shipping route).