Traders work on the floor of the New York Stock Exchange during morning trading on August 18, 2026 in New York City.
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The S&P 500 fell on Tuesday, pressured by a run in sovereign bond yields to multidecade highs amid concerns of persistent inflation and elevated oil prices. A pullback in semiconductor stocks also weighed on the broader market.
The broad market index declined 0.5%, while the Nasdaq Composite was down 1.2%. Western Digital fell 7%, weighing on the Nasdaq. Sandisk dropped 9%. Marvell Technology and Seagate Technology were also down by 9% and 8%, respectively. The Dow Jones Industrial Average shed 73 points, or 0.1%.
The U.S. 30-year Treasury bond yield scored a fresh 19-year high Tuesday. Elsewhere, Japan’s 10-year bond yield reached its highest level in three decades. Germany’s 30-year bond yield hit its highest since 2011, and the French 30-year government bond yield reached its highest point since 2008.
“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,” said 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 you know not going to alleviate tomorrow,” he added.
Yields have been rising of late as investors worry that oil prices could stay higher, with negotiations between Iran and the U.S. stalling. U.S. crude rose on Monday and climbed 0.5% on Tuesday to trade around $85 per barrel.
Hopes for an end to the Middle East conflict continued to fade Tuesday after President Donald Trump said in a Truth Social post Tuesday that the U.S. is not currently engaging in any “talks or conversations” with Iran, nor are there any scheduled. He also said that the naval blockade “remains in full force and effect.”
However, on Monday, the president said he would attack Oman “if it gets in the way” of U.S. efforts to negotiate with Iran.
