U.S. stocks traded mostly lower on Tuesday, extending losses from the previous session as rising long-term Treasury yields pressured technology and financial shares and renewed energy-price concerns added to the inflation outlook.
The S&P 500 declined 0.5%, while the Nasdaq fell 1.6%. The Dow Jones Industrial Average was down about 150 points.
Long-term U.S. Treasury yields extended their advance toward multi-year highs as inflation risks and increased debt issuance contributed to higher borrowing costs. The move has placed renewed pressure on equity valuations, particularly across technology companies whose valuations are more sensitive to changes in long-term interest rates.
AI Stocks Retreat as Yields Rise
Shares linked to artificial intelligence infrastructure were broadly lower after providing support to U.S. equities in recent sessions.
Nvidia, Meta, Tesla and Oracle declined by as much as 3%, contributing to the Nasdaq’s underperformance.
Higher yields can weigh disproportionately on growth-oriented technology stocks by increasing the discount rate applied to expected future earnings. The expansion of AI infrastructure is also requiring significant capital as technology companies increase spending on data centers, computing capacity, networking and power.
Financial stocks also came under pressure, with Goldman Sachs and JPMorgan trading lower.
Energy Prices Add to Inflation Concerns
Higher energy prices added another source of pressure as developments involving Iranian oil exports remained in focus.
The combination of elevated energy costs and rising long-term borrowing costs has complicated the outlook for inflation and interest rates at a time when monetary policy remains a central factor for global markets.
Home Depot moved against the broader decline, gaining about 1% after its latest results exceeded earnings expectations.
Tuesday’s session reflects the competing forces currently shaping U.S. equities: continued investment in artificial intelligence on one side and rising financing costs, energy prices and inflation risks on the other.
