The Dow Jones ended with losses of over 300 points, while the S&P 500 and Nasdaq fell 0.7% and 0.8% respectively, after having witnessed a minor recovery from the day’s low. Memory chip stocks, which led the fall on Monday, saw some rebound on Tuesday with SanDisk, Micron, ending with gains between 2% to 3%.
The Bond Market Warning
Higher oil prices aside, it is the elevated level of the US bond yields that are concerning investors currently. The US 30-year treasury yield surged to as high as 5.19% on Tuesday, the highest level since July 2007.
The 10-year note, which is a benchmark for auto loans, mortgages and credit card debt, saw yields spike to 4.687% at one point during the session, marking the highest level since January 2025.
Yield on the two-year note, which acts as a barometer for what the US Federal Reserve might do next in terms of policy action, rose to 4.12% on Tuesday.
Bond yields across the globe have been on the rise as higher energy prices threaten inflationary scenarios, dampening growth prospects and the US is no different.
Experts have warned that market valuations could see a steeper correction if the 30-year yield reaches 5.25% in the coming weeks.
A monthly survey of global fund managers conducted by Bank of America shows as many as 62% of the fund managers surveyed, expect the 30-year yield to touch 6% soon, which will be the highest level since late-1999.
Big Trigger For The Day
The biggest trigger of today’s session, beyond yields and oil prices and the Iran war, will be results from Nvidia Corp., the most valuable company in the world.
Beyond the quarterly performance, the street will be looking forward to the company’s guidance for the upcoming quarter and any clarity on the resumption of business with China after CEO Jensen Huang’s visit as part of US President Donald Trump’s delegation.
