U.S. Stocks Close Mostly Lower As Treasury Yields Extend Surge

(RTTNews) - Following the mixed performance seen in the previous session, the major U.S. stock indexes all moved to lower during trading on Tuesday. Stocks staged a recovery attempt in early afternoon trading but moved back to the downside going into the end of the day.

The major averages all finished the day firmly in negative territory. The Nasdaq slid 220.02 points or 0.8 percent to 25,870.71, the S&P 500 fell 49.44 points or 0.7 percent to 7,353.61 and the Dow declined 322.24 points or 0.7 percent to 49,363.88.

The weakness on Wall Street came amid an extended surge by treasury yields, with the yield on the benchmark ten-year note jumping to its highest levels since January 2025.

Concerns about elevated crude oil prices leading to a sustained acceleration in the pace of inflation continued to drive yields higher.

U.S. crude oil futures have given back some ground on the day but remain well above $100 a barrel amid the ongoing conflict in the Middle East.

While President Donald Trump claimed he called off an attack on Iran at the request of Gulf leaders, traders remain worried about a re-escalation of the conflict.

The high price of crude oil has led to speculation the Federal Reserve could actually raise interest rates in the coming months to combat inflation.

CME Group's FedWatch Tool is currently indicating a 41.9 percent chance rates will be a quarter point higher following the Fed's last monetary policy meeting of the year.

"While the Nasdaq remains near highs and the broader AI trade is still intact, recent sessions have seen some profit-taking in semiconductors and mega-cap tech as yields rise and positioning looks increasingly stretched," said Daniela Hathorn, Senior Market Analyst at Capital.com.

She added, "The market is not abandoning the earnings and AI story but the combination of higher oil, higher yields and extremely strong positioning is making it harder for the sector to continue its near-vertical ascent without pauses or pullbacks."

In U.S. economic news, the National Association of Realtors released a report showing pending home sales in the U.S. jumped by more than expected in the month of April.

NAR said its pending home sales index shot up by 1.4 percent to 74.8 in April after surging by 1.7 percent to an upwardly revised 73.8 in March.

Economists had expected pending home sales to increase by 0.9 percent compared to the 1.5 percent leap originally reported for the previous month.

Sector News

Gold stocks moved sharply lower amid a steep drop by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 3.7 percent to its lowest closing level in well over a month.

Substantial weakness was also visible among airline stocks, as reflected, as reflected by the 3.4 percent plunge by the NYSE Arca Airline Index.

Housing, brokerage and computer hardware stocks also saw considerable weakness on the day, while pharmaceutical, natural gas and healthcare stocks moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while China's Shanghai Composite Index advanced by 0.9 percent.

The major European markets also turned mixed on the day. While the French CAC 40 Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index crept up by 0.1 and the German DAX Index rose by 0.4 percent.

In the bond market, treasuries moved to the downside, extending the slump seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 4.4 basis points to a one-year closing high of 4.667 percent.