FX.co ★ US Stocks Hold Decline

US stocks extended their decline on Tuesday, adding to the previous session’s pullback amid renewed pressure from rising bond yields. The S&P 500, Dow, and Nasdaq 100 each slipped as much as 0.5%. Long-dated Treasury yields climbed further after an escalation of strikes in the Middle East darkened the outlook for regional energy supplies, amplifying inflation risks and the likelihood of a more hawkish Federal Reserve response.

Futures markets are pricing in a 25-basis-point rate hike from the Fed tomorrow, with this year’s rise in fuel prices having helped push underlying inflation higher. Most equity sectors traded lower, led by credit‑sensitive AI hyperscalers, where growing debt loads are increasingly at odds with higher borrowing costs. Alphabet, Microsoft, and Meta each fell about 1%.

In contrast, semiconductor stocks rebounded from Monday’s sell-off as investors weighed how heightened concerns over AI safety might slow the pace of infrastructure investment. Nvidia, Lam Research, and Intel all advanced around 1%.