U.S. equity markets retreated on Tuesday as rising long-term bond yields and geopolitical tensions in the Middle East pressured risk assets, with technology stocks bearing the brunt of the decline.
The Nasdaq 100 led losses, falling 1.49% to 29,548 points in early trading, extending a pullback from Monday’s tentative rebound. The Dow Jones Industrial Average slipped marginally into negative territory, ending at 53,434 points, while the S&P 500 declined 0.50% to 7,706 points. Analysts attributed the broad-based retreat to a confluence of factors, including elevated bond yields and escalating regional instability.
Among individual stocks, semiconductor and AI-related names saw pronounced weakness. Nvidia shares slipped 2.2%, while Micron, Sandisk, and Marvell Technology each recorded losses between 4.9% and 6.8%. Fabrinet’s stock plummeted more than 18% after analysts cited disappointing Datacom sales in process engineering and manufacturing services. Baidu’s U.S.-listed shares fell nearly 9% following a sharply lower second-quarter profit, driven by weak online marketing revenue.
Home Depot, the world’s largest home improvement retailer, reported second-quarter results that exceeded expectations, though its shares rose only modestly. The divergence highlighted the uneven impact of macro headwinds across sectors.
Emma Moriarty, portfolio manager at CG Asset Management, noted that rising long-term yields and escalating Middle East tensions were undermining equity valuations. «The situation in the Middle East is clearly escalating again, and long-term interest rates are rising—these are factors that ultimately erode the value of equities,» she said.
Oil prices continued to climb, supported by the ongoing Iran conflict, further dampening investor appetite for risk. Profit-taking in AI-related equities also contributed to the broad-based retreat, as rising bond yields reduced the relative attractiveness of high-growth sectors.
