The S&P 500 fell for a third consecutive day on Tuesday, pressured by soaring global bond yields and elevated oil prices. Investors are also wary of persistent inflation concerns and geopolitical tensions in the Middle East.
Declines were seen across major indices, with the Nasdaq Composite experiencing a significant drop, partly due to weakness in semiconductor stocks like Western Digital and Sandisk. Meanwhile, Johnson & Johnson shares trended towards a record close, and health care and biotech sectors reached new all-time highs.
The S&P 500 experienced a decline on Tuesday, weighed down by a surge in sovereign bond yields reaching multidecade highs. This upward trend in yields, coupled with elevated oil prices, cast a shadow over the market. A significant pullback in semiconductor stocks also contributed to the broader market's downturn.
The S&P 500 index closed down 0.69% at 7,691.76, marking its third consecutive session of losses. The Nasdaq Composite saw a steeper drop, falling 1.33% to end at 26,289.71. Among the notable decliners, Western Digital fell 7%, significantly impacting the Nasdaq. Sandisk dropped 9%, while Marvell Technology and Seagate Technology saw declines of nearly 8% and over 9%, respectively. The Dow Jones Industrial Average shed 116.38 points, or 0.22%, to close at 53,343.40.
The U.S. 30-year Treasury bond yield hit a fresh 19-year high on Tuesday. Globally, Japan's 10-year bond yield reached its highest in three decades, Germany's 30-year bond yield hit its highest since 2011, and France's 30-year government bond yield reached its highest point since 2008.
These rising yields are largely attributed to investor concerns that oil prices will remain elevated, exacerbated by stalled negotiations between Iran and the U.S. U.S. crude futures, after rising on Monday, climbed another 0.5% on Tuesday to $84.94 per barrel.
"The market is overlooking the challenge on the bond yield side and preferring to focus on the solid earnings and the enhancements in artificial intelligence," noted Bill Fitzpatrick, portfolio manager at Logan Capital Management. "At some point, we're probably going to be vulnerable to a bit of a sell-off. "The factors that are driving up bond yields are not going to alleviate tomorrow," he added.
Hopes for a resolution in the Middle East conflict dimmed further on Tuesday after President Donald Trump stated on Truth Social that the U.S. is not engaged in any talks with Iran, nor are any scheduled, and that the naval blockade remains in full effect. This comes after President Trump's statement on Monday about potentially attacking Oman if it impeded U.S. negotiation efforts with Iran.
Stocks close lower
The three major averages concluded Tuesday's trading session in negative territory.
The S&P 500 declined 0.69% to end at 7,691.76, while the Nasdaq Composite lost 1.33% to settle at 26,289.71. The Dow Jones Industrial Average shed 116.38 points, or 0.22%, closing at 53,343.40.
Johnson & Johnson on track for record close
Johnson & Johnson offices in Irvine, California, US, on Friday, Oct. 10, 2025.
Kyle Grillot | Bloomberg | Getty Images
Shares of Johnson & Johnson rose over 3% in afternoon trading Tuesday, heading toward a fresh closing record. If sustained, this would mark the stock's first record close since July 7. The stock has advanced approximately 31% year-to-date, more than doubling the S&P 500's performance over the same period.
Health care, biotech stocks climb to all-time highs Tuesday
Health care and biotechnology stocks reached all-time highs on Tuesday, as investors sought strength in sectors beyond technology. The State Street Health Care Select Sector SPDR ETF, a fund holding 62 stocks, achieved a record. Its total return over the past three months, including reinvested dividends, stands at 15.6%, significantly outperforming the S&P 500's 4.8%. Eli Lilly and Johnson & Johnson constitute 26% of its portfolio. Similarly, the Vanguard Health Care Index Fund, with 415 stocks, also hit a record, posting a three-month total return of 16.6%. Lilly and J&J make up 22.2% of this fund. The iShares Biotechnology ETF (up 21.1% in three months), the Nasdaq Biotechnology index (higher by 18.5%), and the S&P 500 Health Care index (15.7% total return) also reached new highs.
What's behind the move in U.S. government debt yields
Treasury yields continue their upward trajectory, intensifying the impact of the substantial U.S. government debt. Longer-dated debt has been particularly affected, pushing the 30-year bond yield near its highest level in over two decades. This rise is attributed to several factors, including concerns over the budget deficit, persistent inflation above the Federal Reserve's target, and increased corporate debt issuance competing for investor attention. A rising term premium, the additional yield investors demand for holding U.S. debt, also contributes to this trend.
Home Depot fails to raise full year guidance again
A shopper carries a bucket inside a Home Depot store in San Jose, California, US, on Thursday, Aug. 13, 2026.
David Paul Morris | Bloomberg | Getty Images
For the second consecutive quarter, Home Depot maintained its full-year guidance despite exceeding earnings and revenue expectations. This stability in outlook, despite strong first-half performance including tariff refunds, suggests caution for the latter half of the year. Executives cited headwinds from unplanned increases in input costs and pressure on larger discretionary projects.
Buy Duolingo, D.A. Davidson says
The Duolingo website on a smartphone arranged in the Brooklyn borough of New York, US, on Thursday, May 4, 2023.
Gabby Jones | Bloomberg | Getty Images
D.A. Davidson upgraded Duolingo to a "Buy" rating, citing potential for a rebound driven by business refreshes and improved profitability. The firm raised its price target to $160, suggesting 23% upside. Davidson believes investors are underestimating the company's product development, marketing initiatives, and core monetization engine, pointing to a significant growth runway.
Tesla, Fabrinet and Micron Technology among the stocks making premarket moves
The Tesla logo is displayed at a Tesla dealership on July 2, 2026 in Alhambra, California.
Mario Tama | Getty Images
Several companies made notable premarket moves. Tesla dipped amid reports of an upcoming robotaxi launch. Fabrinet dropped despite exceeding earnings expectations, due to expected seasonal margin headwinds. Memory chip makers, including Micron Technology, also experienced declines.
Home Depot posts Q2 beat, reaffirms guidance
A Home Depot store in San Jose, California, US, on Thursday, Aug. 13, 2026.
Home Depot announced second-quarter results that surpassed analyst expectations, though its stock saw only a modest increase as the company maintained its full-year guidance. CFO Richard McPhail cited challenging conditions in the housing market but highlighted the company's market share gains and strategic execution.
Here's the latest ahead of the opening bell on Wall Street
U.S. stock futures pointed to a lower open on Tuesday, following a losing start to the week for the major averages. Global borrowing costs have risen significantly, with long-term bond yields near multi-decade highs. Investors awaited July import/export prices, housing starts, and pending home sales data. European markets were mixed in morning trading.
Japan's Nikkei 225 leads losses as Asia markets close lower
Asia-Pacific markets concluded Tuesday mostly lower, led by a substantial decline in Japan's Nikkei 225. Other regional indexes, including South Korea's Kospi, also fell, while Australia's S&P/ASX 200 remained flat. Mainland China's CSI 300 and Hong Kong's Hang Seng Index saw modest declines.
European stocks fall
European equity markets experienced widespread declines in morning trade. Germany's DAX and France's CAC 40 were down, while the U.K.'s FTSE 100 saw a slight increase. H&M was a notable performer, rising on analyst upgrades.
U.K. unemployment rate holds steady
The U.K.'s unemployment rate remained unchanged at 4.9% for the three months ending June, slightly missing consensus estimates. While the rise in payrolled employees fell short of forecasts, average weekly earnings met expectations. The pound saw a minor dip against the dollar following the jobs report.
Global bond yields rise to record levels
Renewed inflation concerns are driving government borrowing costs globally to record levels, with many longer-maturity bond yields nearing multi-decade highs. U.S. 30-year Treasury yields reached their highest since 2002, while yields in Japan, Germany, and France also hit significant milestones.
Yield on 30-year Treasurys hovers near 19-year high as bond sell-off deepens
U.S. Treasury yields continued to climb Tuesday, with longer-dated yields approaching multi-decade highs as investors sold off government bonds. The 30-year Treasury yield neared its highest level since 2007, and the 10-year yield also saw an increase. Factors contributing to this trend include fiscal outlook concerns, heavy debt supply, elevated oil prices, and geopolitical tensions.
Oil rises amid worries over renewed hostilities as U.S.-Iran ceasefire lapses
Brent crude futures for October delivery gained 0.48% at $91.31 a barrel.
Oil prices increased on Tuesday amid concerns over supply disruptions and potential renewed Middle East hostilities, following President Trump's decision not to extend the Iran ceasefire. Brent crude and West Texas Intermediate futures saw gains. Geopolitical tensions, including threats towards Oman and escalation in Lebanon, are contributing to market unease.
Yen holds steady at 159 per dollar; U.S. has ample firepower for more yen intervention, Macquarie says
A netizen displays Japanese yen and US dollars on August 3, 2026 in Yichang, Hubei Province of China.
Liu Junfeng|VCG|Getty Images
The Japanese yen remained stable around 159 against the dollar. Macquarie estimates that U.S. authorities possess significant capacity for further intervention if the yen weakens further, noting that their direct involvement in previous interventions was relatively small.
China 10-year government bond yield gap widens with U.S. Treasurys
The yield differential between China's 10-year government bond and U.S. 10-year Treasurys is expanding, reflecting diverging economic conditions between the two nations. Weaker Chinese economic data has fueled expectations of policy easing, potentially widening this spread further.
South Korea stocks rise at open, Japanese benchmarks fall
South Korean stocks opened higher, driven by gains in major chipmakers, while most other Asia-Pacific markets traded lower. Japanese benchmarks saw declines, and Australian and Hong Kong markets were mixed.
Asia-Pacific markets set to open lower as investors assess U.S.-Iran tensions
Asia-Pacific markets were poised for a lower open as investors reacted to heightened U.S.-Iran tensions and President Trump's comments regarding a potential ceasefire and military action. Futures for Japan's Nikkei 225, Hong Kong's Hang Seng index, and Australia's S&P/ASX 200 indicated declines.
L3Harris ousts CEO
Chris Kubasik during the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, July 10, 2026.
David Paul Morris | Bloomberg | Getty Images
L3Harris Technologies announced the removal of CEO Chris Kubasik following a discovery of conduct inconsistent with company values. Sam Mehta has been appointed as the new CEO and president.
