Chip stocks reversed Monday's selloff, but the Dow, S&P 500, and Nasdaq still closed lower on Tuesday as Treasury yields hit a 19-year high and oil prices climbed. The rebound in semiconductor names couldn't offset bond-market pressure ahead of Wednesday's Fed decision.
The Dow Jones Industrial Average and Nasdaq Composite each fell 0.7% by early Tuesday afternoon, while the S&P 500 slipped 0.4%. Only seven of the Dow's 30 stocks posted gains at that point. By the close, the S&P 500 finished 0.48% lower and the Nasdaq dropped 0.56%, according to Crypto Briefing.
Chip stocks reverse Monday's selloff
Semiconductor names did most of the recovering. Qualcomm rose 4% and Advanced Micro Devices gained 2.3%, while Nvidia edged higher. The rebound followed an essay from Anthropic CEO Dario Amodei urging the AI industry to slow the development of frontier models, citing safety concerns. OpenAI's Sam Altman and Elon Musk echoed similar sentiments.
That essay had driven a rough Monday. The Philadelphia Semiconductor Index dropped between 5% and 5.9% in a single session, and Nvidia shed 3.4%. By Tuesday, investors were asking whether a few essays could really derail hundreds of billions of dollars in committed AI spending.
Treasury yields climb to a 19-year high
The 10-year Treasury yield climbed to 5.041% on Tuesday, the highest level since July 2007. The 30-year yield hit 5.401%, also a 19-year record. 30-year mortgage rates crossed 7% last week.
Oil added to the pressure. Brent crude rose 2.6% to $108.41 and U.S. crude added 3.3% to $104.76 as traders weighed how long Saudi Arabia's East-West pipeline stays offline. The United States Oil Fund gained 4.1%.
Bank stocks slide as Fed decision looms
Goldman Sachs fell 2.9%, taking 171 Dow points with it, the day's biggest single drag. JPMorgan Chase dropped 1.6%. Chevron posted a 2% gain, another sign of rising oil prices.
Futures now give a quarter-point hike better than 92% odds at Wednesday's Fed meeting. But what Chair Kevin Warsh signals about future meetings will matter more than Wednesday's rate hike itself.
Sources: The Motley Fool, Crypto Briefing
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