US Markets Fall Despite Chip Sector Rebound
The major US indexes took a hit on Tuesday, despite a rebound in chip stocks. The Dow Jones Industrial Average and Nasdaq Composite each fell by 0.7%, while the S&P 500 dropped by 0.4%. Qualcomm saw a 4% increase and Advanced Micro Devices gained 2.3%, but these gains were not enough to offset losses in other sectors.
The 10-year Treasury yield rose to its highest level since July 2007, reaching 5.041%. This move is expected to have far-reaching effects on interest rates for everything from car loans to corporate borrowing. The 30-year bond hit a 19-year high of 5.401%, and 30-year mortgage rates surpassed 7% last week.
Oil prices also continued their upward trend, with Brent crude rising by 2.6% to $108.41 and US crude increasing by 3.3% to $104.76. The shutdown of Saudi Arabia's East-West oil pipeline is still causing uncertainty in the market, with Energy Secretary Chris Wright estimating that it will be down for days, while oil analyst Andy Lipow predicts months.
The chip sector's recovery from Monday's losses was short-lived, as the major indexes continued to fall. Goldman Sachs led the Dow's decline, dropping by 2.9% and pulling 171 points with it. Big tech companies including Amazon and Apple also suffered losses due to various regulatory issues and damage from the Iran war.