Stock Market Faces Tech Retreat and Bond Yield pressure
On Tuesday, Wall Street’s upward trend hit a snag. Investors moved away from tech stocks, and rising bond yields put pressure on equities. The Dow Jones Industrial Average dropped by 114.83 points, or 0.27%. The S&P 500 also fell by 0.39%, ending its six-day winning streak.
The Nasdaq Composite slid 0.38%, with chipmakers and megacaps taking a hit. Nvidia, AMD, Meta, Apple, and Microsoft led the losses. The tech sector was the S&P 500’s worst performer, falling about 0.9%. This pullback comes after a five-week rebound that lifted the S&P 500 more than 20% from its April low.
Bill Northey of U.S. Bank Wealth Management noted, “We’ve seen a tariff-related swoon, a strong rally, and now we’re waiting for clarity. It’s optimism without clear direction.”
Bond markets added to the unease. The 10-year treasury yield climbed to 4.48%, while the 30-year briefly topped 5% for the second straight day—its highest since November 2023. This rise follows Moody’s decision to downgrade U.S.debt due to growing deficits and rising interest expenses.
Analysts warn that yields at or above 4.5% can challenge equity valuations.morgan Stanley’s Michael Wilson noted that equities face valuation pressure when the 10-year yield exceeds 4.5%.
On a positive note, Tesla shares rose 2% after Elon Musk reaffirmed his commitment to stay CEO for at least five more years. Though, President Trump faced setbacks on a key tax bill, jeopardizing its passage before Memorial Day.
