The S&P 500 closed lower for a third straight session on Tuesday as surging global bond yields and rising oil prices pressured stocks, with a pullback in semiconductor names adding to the drag. The Nasdaq Composite and Dow Jones Industrial Average also finished in the red.
The S&P 500 declined 0.69% to end the session at 7,691.76, posting a third consecutive losing session. The Nasdaq Composite lost 1.33% to settle at 26,289.71. The Dow Jones Industrial Average shed 116.38 points, or 0.22%, to close at 53,343.40.
Chip stocks weigh on the Nasdaq
A pullback in semiconductor stocks weighed on the broader market. Western Digital fell 7%, dragging on the Nasdaq. Sandisk dropped 9%. Marvell Technology and Seagate Technology were also down by nearly 8% and more than 9%, respectively.
Bond yields climb to multidecade highs
The U.S. 30-year Treasury bond yield scored a fresh 19-year high on Tuesday, as investors worried about persistent inflation and elevated oil prices. Elsewhere, 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.
Oil prices and Iran tensions add pressure
Yields have risen lately on worries that oil prices could stay elevated, with negotiations between Iran and the U.S. stalling. U.S. crude futures rose on Monday and climbed another 0.5% on Tuesday to $84.94 per barrel. According to Bill Fitzpatrick, portfolio manager at Logan Capital Management: "The factors that are driving up bond yields are not going to alleviate tomorrow."
Hopes for an end to the Middle East conflict continued to fade Tuesday after President Trump said the U.S. is not currently engaging in any talks or conversations with Iran, nor are any scheduled. He also said the naval blockade remains in full force and effect.
Source: US Top News and Analysis
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