Stocks Plunge as Oil Prices Rise and Bond Yields Soar

Stocks closed lower on Wall Street Tuesday due to pressure from higher oil prices and rising bond yields.

The S&P 500 index fell 0.7%, while the Dow Jones Industrial Average dropped 0.8% and the Nasdaq composite slid 1%. The major indexes have lost ground for three consecutive days, following a shaky but mostly positive month in August.

Tech stocks were among the heaviest weights on the market, with Nvidia falling 1.5%, Amazon dropping 1.9%, and Advanced Micro Devices giving up 2.4%. Their large market values tend to give them more influence over the broader market's direction, and their growth has been heavily reliant on borrowing, which becomes more expensive as interest rates rise.

The ongoing sell-off in U.S. government bonds is also contributing to the pressure on stocks. The yield on the 10-year Treasury rose to 4.79% from 4.75%, while the yield on the 2-year Treasury climbed to 4.39% from 4.34%. Rising yields signal that investors are demanding a higher return from Treasurys because they are becoming riskier, and growing government debt is highlighting this risk.