Wall Street Retreats as AI Stocks Sink Amid High Yields

Wall Street retreated further from its record high on Tuesday as AI stocks continued to sink. The S&P 500 fell 0.5% and is on track for a third consecutive modest loss since reaching an all-time high on Thursday.

The Dow Jones Industrial Average dropped 33 points, while the Nasdaq composite sank 1.3%. Stocks that have been at the forefront of the AI boom, including Micron Technology and Nvidia, led the decline with losses of 5.9% and 2.5%, respectively.

High yields in bond markets, which remained above their pre-war levels despite a slight drop on Tuesday, added to the pressure on stocks. The yield on the 10-year U.S. Treasury ticked down to 4.71% from 4.72% late Monday but remains well above its level from just before the war with Iran began.

Experts warn that high yields could slow borrowing by Big Tech companies, which is a key driver of growth for the U.S. economy. Home Depot's stock rose 0.8% despite weaker-than-expected housing data, while Klarna fell 20.5% after cutting its financial forecasts for the full year.