Wall Street pulls further from records under pressure of bond market

By STAN CHOE, AP Business Writer

NEW YORK (AP) — Wall Street is pulling further from its records on Tuesday, ground down by tightening pressure from the bond market.

The S&P 500 sank 0.9% after falling as much as 1.4% at the start of trading. The Dow Jones Industrial Average was down 305 points, or 0.7%, as of 10:10 a.m. Eastern time, and the Nasdaq composite was down 1.1%. All three are still relatively close to their recently set all-time highs.

Nvidia and other companies that have benefited from the frenzy around artificial-intelligence technology were some of the heaviest weights on the market. They have soared for years on belief that they’re at the vanguard of the next revolution for the global economy. But they’ve also shot so high that critics say their prices have simply become too expensive.

Nvidia, whose chips are powering much of the move into AI, fell 2.1%.

Other losing Big Tech stocks included Amazon, which fell 1.9%, and Alphabet, which sank 1.8%.

The overall stock market was feeling pressure from rising yields in the bond market, where the 10-year Treasury yield climbed to 4.26% from 4.23% late Friday. When bonds are paying more in interest, investors are less willing to pay high prices for stocks.

Longer-term bond yields are on the rise around the world, in part because of worries about how difficult it will be for governments to repay their growing mountains of debt.

In the United States, longer-term Treasury yields are feeling added pressure from President Donald Trump’s attacks on the Federal Reserve for not cutting interest rates sooner. The fear is that a less independent Fed will be less likely to make the unpopular decisions needed to keep inflation under control, such as keeping short-term interest rates higher than investors would like.

Tuesday was also the first opportunity for trading in the U.S. Treasury market after a federal appeals court ruled that Trump overstepped his legal authority when announcing sweeping tariffs on almost every country on Earth, though it left the tariffs in place for now. While the tariffs have created confusion and may have hurt the U.S. job market, they also have brought in revenue that could help the U.S. government pay some of its debt.

In another signal about increasing worries in financial markets, the price of gold rose 1.1% and was near its record. The metal has often provided a haven for investors in times of uncertainty.

Treasury yields did trim their gains a bit after a report said U.S. manufacturing contracted by more last month than economists expected. Many companies told the Institute for Supply Management’s survey that tariffs are continuing to make conditions chaotic.