US stock indices closed lower on Tuesday, weighed down by a selloff in chipmakers and persistently high bond yields. The S&P 500 slipped 0.7%, the Nasdaq 100 dropped 1.7%, and the Dow Jones Industrial Average fell 116 points.
Long-term Treasury yields eased slightly from recent peaks but remained close to multi-year highs, as markets grappled with inflation risks and uncertainty over term premia, exacerbated by heavy bond issuance linked to AI investment. Inflation concerns were further stoked by rising energy prices after the US signaled a prolonged blockade of Iranian oil tanker exports.
Semiconductor stocks at the heart of the AI trade led the decline. Nvidia fell 2.3%, Broadcom lost 3.2%, Micron slid 7%, and AMD retreated 4.3%. Intel dropped 6.6%, while Sandisk plunged 9%. Other major AI-related names also finished lower, with Meta down 4.4%, Tesla off 0.7%, and Oracle shedding 2.7%.
Credit-sensitive financials came under pressure: Goldman Sachs closed down 1%, and Citigroup slipped 0.6%. Home Depot edged 0.1% lower despite topping earnings estimates, as investors remained cautious in the face of elevated borrowing costs and a strained housing market.
