The S&P 500 fell 0.5% on Tuesday as sovereign bond yields climbed to multidecade highs and oil prices rose amid renewed Middle East tensions. Chipmakers led the losses on the Nasdaq, while a portfolio manager said the market remains vulnerable to a sell-off as the pressures behind rising yields show no sign of easing.
The S&P 500 declined 0.5% on Tuesday, pressured by a run in sovereign bond yields to multidecade highs amid concerns of persistent inflation and elevated oil prices. The Nasdaq Composite fell 1.2%, and the Dow Jones Industrial Average shed 73 points, or 0.1%.
The U.S. 30-year Treasury bond yield scored a fresh 19-year high Tuesday. Meanwhile, Japan's 10-year bond yield reached its highest level in three decades. Germany's 30-year bond yield hit its highest since 2011, and the French 30-year government bond yield reached its highest point since 2008.
According to Logan Capital Management portfolio manager Bill Fitzpatrick, the factors driving up bond yields are not going to alleviate tomorrow: "we're probably going to be vulnerable to a bit of a sell-off".
A pullback in semiconductor stocks also weighed on the broader market. Western Digital fell 7%, while Sandisk dropped 9%. Marvell Technology and Seagate Technology were also down 9% and 8%, respectively.
Yields have been rising of late as investors worry that oil prices could stay higher, with negotiations between Iran and the U.S. stalling. U.S. crude rose on Monday and climbed 0.5% on Tuesday to trade around $85 per barrel.
President Donald Trump said in a Truth Social post Tuesday that the U.S. is not currently engaging in any talks or conversations with Iran, nor are there any scheduled, and that the naval blockade remains in full force and effect. On Monday, however, he said he would attack Oman if it gets in the way of U.S. efforts to negotiate with Iran.
Source: CNBC
Trading involves risk.
Risk Disclaimer
