US stock markets extended losses on Tuesday, moving further away from record highs as technology stocks lost momentum and investors remained cautious over rising bond yields, oil price volatility, and geopolitical uncertainty.
Market Performance
The S&P 500 declined 0.5% and was headed for its third consecutive decline after recently touching a record high. The Dow Jones Industrial Average dropped 397 points, or 0.8%, while the Nasdaq Composite slipped 0.6% in early trade, according to AP reports.
Globally, markets were mixed. South Korea's Kospi fell 3.3% as weakness in technology shares weighed on sentiment, while Germany's DAX advanced around 1%.
Technology Sector Weakness
Technology stocks, which had powered markets higher on optimism around artificial intelligence, showed signs of losing steam after a sharp rally that had drawn concerns over stretched valuations. Investors are now closely watching chipmaker Nvidia, scheduled to report quarterly earnings on Wednesday. The company's results are expected to play a key role in determining whether technology stocks can sustain their broader rally. Nvidia shares fell 0.7%.
"Every flow has its ebb," wrote Rex Feng, Venu Krishna, and other strategists at Barclays Capital in a report. They added that investors had been pouring money into US stock funds at an elevated pace, fueling "the fastest rebound in decades; now the pendulum could swing backwards."
Individual Stock Movements
Among individual stocks, Akamai Technologies dropped 3.9% after the cybersecurity and cloud services company announced plans to raise $2.6 billion through a convertible note offering. Home Depot declined 2.2% despite reporting quarterly earnings that exceeded analyst expectations. However, sales growth at stores operating for more than a year missed some estimates. CEO Ted Decker said Home Depot witnessed demand trends similar to last year "despite greater consumer uncertainty and housing affordability pressure."
Bond Yields and Oil Prices
Bond yields continued to climb. The yield on the benchmark 10-year US Treasury rose to 4.66% from 4.61% on Monday and remained significantly above levels seen before the Iran conflict. Oil prices eased slightly after recent sharp moves. Brent crude fell 0.7% to $111.39 per barrel, though prices have largely stayed above $100 since the start of the Iran conflict. The average US gasoline price rose again to $4.53 a gallon, according to AAA, up around 43% from the same period last year.
