US STOCKS-Wall St slips as inflation worries push yields to new highs

Seven of the 11 major S&P 500 sectors were lower with consumer discretionary and technology being the biggest drags ⁠on the benchmark index. The S&P 500 and the tech-heavy Nasdaq extended losses for the third consecutive session, as rising yields pressured technology and other growth stocks.

Wall Street's main indexes fell on Tuesday, pressured ‌by ​technology and consumer discretionary stocks, as mounting inflation concerns sent the benchmark 10-year Treasury yield to its highest level in more than a year. An equities rally halted on Friday after a selloff in global bond markets evoked fears of major ‌central banks tightening monetary policy, with the Middle East conflict pushing oil prices higher and stoking inflation concerns.

Brent crude futures dipped 1.1%, but were still above $110 a barrel after U.S. President Donald Trump said on social media on Monday that he had held off on a planned military strike against Iran, scheduled for Tuesday, while negotiations continued. The 10-year Treasury yield ‌surged after an earlier dip. It hit the highest level since January 2025 at 4.6653%.

"I do think tightening financial conditions driven by rising rates is the number ‌one driver of the recent sell-off," said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. "When you look at the 10-year Treasury, historically, 4.5% has been the line in the sand that's created real anxiety and we've clearly moved through those thresholds. If we do get a resolution on the Middle Eastern front, yields will move lower from here."

At 12:04 p.m. ET, the Dow Jones Industrial Average fell ⁠247.70 points, or ​0.50%, to 49,438.42, the S&P 500 lost ⁠47.99 points, or 0.65%, to 7,355.06 and the Nasdaq Composite lost 254.57 points, or 0.98%, to 25,835.00. Seven of the 11 major S&P 500 sectors were lower with consumer discretionary and technology being the biggest drags ⁠on the benchmark index.

The S&P 500 and the tech-heavy Nasdaq extended losses for the third consecutive session, as rising yields pressured technology and other growth stocks. Higher yields typically hurt such companies ​because their valuations depend heavily on future profit expectations. Software stocks, which had helped lead gains earlier in the session, were also caught in the broader ⁠selling pressure. The S&P 500 software index slipped 0.3%, after gaining roughly 5% over the previous three sessions.

Healthcare was a rare bright spot and led sector gains by rising 1.3%. Among other movers, cloud firm Akamai ⁠Technologies fell ​4.9% after announcing a $2.6 billion convertible bond offering.

On Wednesday, investors will focus on minutes from the U.S. Federal Reserve's latest policy meeting for clues on how much support there was among policymakers to pivot to a neutral stance from an easing bias. Markets are pricing in more than a 41% chance the central bank will raise interest ⁠rates by at least 25 basis points in January, according to CME's FedWatch tool.

Nvidia's earnings, also due Wednesday, are a major test for markets. The world's most ⁠valuable company will be closely watched for evidence ⁠AI-driven demand is strong enough to justify elevated valuations across semiconductors. Declining issues outnumbered advancers by a 2.49-to-1 ratio on the NYSE and by a 1.82-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and 21 new lows while ‌the Nasdaq Composite recorded ‌30 new highs and 143 new lows.