US Stocks Slip as Treasury Yields Climb; AI Optimism Fails to Lift Market
US Stocks Slip as Treasury Yields Climb; AI Optimism Fails to Lift Market
US stocks closed modestly lower on Tuesday, pressured by steadily rising Treasury yields, even as major artificial intelligence deals briefly lifted technology shares but failed to reverse the broader decline across the three major indexes.
Major Indexes Close Lower
At Tuesday’s close, the Dow Jones Industrial Average fell 131.59 points, or 0.26%, to 51,349.92, its second straight decline and a two-day loss of 0.92%. The S&P 500 dropped 12.85 points, or 0.2%, to 7,670.84. The Nasdaq Composite slipped 22.84 points, or 0.09%, to 26,797.54, also down for a second consecutive session.
Intraday trading was choppy, with the S&P 500 and Nasdaq briefly climbing on tech buying before fading.
Treasury Yields Keep Climbing
The bond market was the day’s central source of pressure. The 10-year Treasury yield climbed to 5.287%, its highest level since 2007. The 30-year yield pushed above 5.5%, also near multiyear highs.
The persistent rise in yields reflects concerns about sticky inflation and higher borrowing costs, and reinforces expectations that the Federal Reserve will keep policy tight. Fed Governor Michael Barr said Tuesday that “higher rates may be needed” to bring inflation back to the 2% target. Higher yields increase the opportunity cost of holding equities, pressuring stock valuations.
AI News Fails to Turn the Tide
Major artificial intelligence developments were among the few bright spots but did not change the market’s direction.
According to Reuters, Anthropic’s IPO prospectus shows the company targeting a valuation of more than **$2 trillion**, far above its previous valuation of roughly $965 billion. The news briefly lifted tech sentiment, and semiconductor stocks rebounded after Monday’s sharp selloff, with the Philadelphia Semiconductor Index up as much as 2.1%.
Among individual names, AMD announced an **$8.2 billion** acquisition of AI startup World Labs, extending the prior day’s gains. **Nvidia** edged higher after announcing a record $150 billion increase to its share buyback program on Monday.
Still, strength in a handful of tech names could not offset weakness in rate-sensitive sectors, and the broader market finished lower.
Weak Economic Data Add Pressure
Tuesday’s economic data also weighed on sentiment. Labor Department figures showed job openings fell to 7.079 million in August, below July’s 7.335 million and the 7.228 million expected. Meanwhile, the Conference Board’s consumer confidence index dropped to 81.9 in September from 88.6 in August, missing the 89 forecast and marking the lowest reading since early 2014.
Sectors and Individual Movers
Utilities were among the best-performing S&P 500 sectors, while financials and health care lagged.
Among Dow components, Boeing rose 1.78%, Amgen gained 1.31%, and Caterpillar added 0.82%. On the downside, Apple fell 2.66%, Walmart lost 1.78%, and Johnson & Johnson dropped 1.61%.
Storage and semiconductor names were mixed. In Monday’s session, SK Hynix fell more than 5%, SanDisk lost over 3%, and Micron dropped more than 2%, while ARM tumbled 8.7% and Qualcomm slid over 7%.
Chinese ADRs bucked the trend, with the Nasdaq Golden Dragon China Index up 1.12%. NetEase gained nearly 5%, BOSS Zhipin rose over 4%, and KE Holdings and H World Group each added more than 3%.
Market Context and Outlook
The back-to-back declines come as US equity valuations sit near historic highs. The Shiller CAPE ratio — which measures stock prices against a decade of earnings — is at its highest level since 1999, amplifying concerns about a potential pullback.
Investors will watch more key economic data this week, including the August PCE price index and the September nonfarm payrolls report, which could further shape expectations for the Fed’s policy path.
