Bond Market Yields Surge, Sending US Stocks Lower Amid Tech Selloff
The US stock market closed lower on Tuesday as technology and semiconductor shares saw a sharp retreat. The S&P 500 fell by 0.69% to 7,691.76, while the Nasdaq Composite lost 1.33% and the Dow Jones Industrial Average slipped by 0.22%. The Philadelphia Semiconductor Index dropped nearly 5%, with Nvidia, Micron, and other chip stocks among the main drags.
The move comes just a week after the S&P 500 closed at a record high of 7,798.99 on August 13. This rally was supported by softer inflation data and renewed strength in large technology stocks, but higher bond yields have quickly changed the backdrop for equities.
The biggest pressure is coming from the long end of the bond market. The U.S. 30-year Treasury yield climbed as high as 5.327% on Tuesday, its highest level since 2007, while the 10-year yield briefly traded above 4.72%. Japan's 10-year government bond yield reached a 30-year high of 2.945%, and government borrowing costs in several European markets have also climbed to levels last seen well over a decade ago.