Stocks Slip again as Rising Treasury Yields Rattle Investors

CNBC, the Wall Street Journal, Reuters, and Market Watch contributed to this report.

US stocks stumbled again on Tuesday as the bond market kept flashing warning signs.

The S&P 500 fell 0.2%, the Nasdaq Composite dropped 0.4%, and the Dow lost 107 points, or 0.2%. That put both the S&P 500 and Nasdaq on track for a third straight losing session, with higher yields doing the heavy lifting on the downside.

The main problem is the bond market. The 30-year Treasury yield climbed to 5.198%, its highest level in nearly 19 years, while the 10-year yield pushed up to 4.6653%, its highest since January 2025. That matters because higher yields make borrowing more expensive for households and companies, and they also put pressure on richly valued tech stocks whose future earnings suddenly look less appealing.

This is where the “bond vigilantes” come in. Investors are selling Treasurys to push back against what they see as inflation risks, especially with oil prices still elevated and the Middle East conflict feeding uncertainty. As Will McGough of Prime Capital Financial put it, rising energy costs are keeping inflation worries alive, and the market is clearly noticing.

The pressure is showing up everywhere. Consumer discretionary stocks and technology were the biggest drags on the S&P 500, while software shares, which had been strong just days ago, lost steam too. Healthcare was one of the few pockets of strength.

Semiconductors were also under the microscope. The Philadelphia Semiconductor Index was lower earlier in the day before trimming losses, but the mood around chips is still shaky. Nvidia, which reports earnings Wednesday, was flat after an early dip. Micron swung back into positive territory, while Qualcomm and Broadcom were both lower.

That’s a sharp change from the run-up investors had been enjoying. Last week, the S&P 500 and Nasdaq hit fresh records, and the Dow briefly crossed 50,000. The pullback since then has been all about rates. When yields move this fast, growth stocks tend to feel it first.

Oil added another layer of tension. Brent crude remained above $110 a barrel even after easing slightly, while West Texas Intermediate also slipped but stayed high. Trump’s decision to call off a planned strike on Iran eased nerves a bit, but not enough to fully calm markets.

Akamai Technologies was another loser after announcing a convertible bond offering, which investors clearly did not love.

The real test may come Wednesday, when the Fed minutes land and Nvidia reports earnings. Traders want clues on whether policymakers are leaning more hawkish, and whether AI demand is still strong enough to justify the sky-high expectations built into chip stocks.

For now, the market is stuck in a tough spot: bond yields are rising, inflation is not behaving, and the tech trade that carried stocks higher is suddenly looking a lot less comfortable.