US Stock Market Today: Wall Street Pulls Back from All-Time Highs as AI-Related Stocks Fall
US stock market today: Wall Street benchmarks moved further away from their all-time high on Tuesday as technology stocks linked to the rise of artificial intelligence came under renewed selling pressure.The S&P 500 fell 0.5%, putting it on track for a modest third consecutive decline since hitting its all-time high on Thursday. As of 9:35 a.m. ET, the Dow Jones Industrial Average was down 131 points, or 0.2%, while the Nasdaq Composite was down 1.1%.
AI Stocks Under Pressure
The decline was led by several of the market’s biggest recent winners, particularly companies that have benefited from increased spending on artificial intelligence, according to an AP report.Its shares have swung wildly this summer as investors question whether valuations have risen too much and whether demand for memory, processors and other data center components can remain strong if AI fails to generate the level of profits investors expect.Micron Technology fell 3.5%, making the computer memory maker one of the biggest drags on the S&P 500. Chipmakers Nvidia and Broadcom also weighed on the index, falling 1.6% and 2.2%, respectively.Despite recent volatility, these stocks remain among the market’s best performers this year. Micron, for example, has earned more than three times as much.However, highly valued stocks tend to face greater scrutiny when borrowing costs are rising and bond yields remained elevated in global markets on Tuesday.
The yield on the 10-year U.S. Treasury bond was unchanged at 4.72%, matching its level at the end of Monday’s session.
It remains considerably above the 3.97% recorded before the war with Iran began. Meanwhile, the 30-year Treasury yield hovered around its highest level since 2007.Treasury yields have risen sharply since the war began, as high oil prices added to inflationary pressure and raised expectations that the Federal Reserve and other central banks may need to raise interest rates. At the same time, concerns about governments carrying heavy debt burdens and continuing to borrow heavily have kept bond yields elevated.Although the bond market often operates out of the spotlight, movements in yields can have a significant impact on financial markets and authorities around the world, including President Donald Trump. When yields rise, investors tend to be less willing to pay high valuations for stocks and other assets, particularly those already considered expensive.
Oil prices rise
Oil prices have been a major factor behind the rise in yields.
Brent crude rose 0.6% to $91.45 a barrel. Prices have remained highly volatile as markets assess when, or even if, the United States and Iran can reach a deal that would allow oil tankers to resume unrestricted passage out of the Persian Gulf.Global stock markets delivered mixed performance in Europe and Asia.South Korea’s Kospi, where two tech heavyweights, Samsung Electronics and SK Hynix, dominate the market, has seen some of the world’s sharpest swings related to the rise of AI. The index fell 1.5% on Tuesday, a relatively moderate move by its recent standards. In each of the previous three sessions, it had advanced at least 2.4%.
