Wall Street Weakens; High Yields Weigh on Tech Stocks
US stock markets traded lower on Tuesday (August 18), extending the downward pressure seen in the previous session. The S&P 500 fell by approximately 0.5%, the Nasdaq slumped 1.6%, and the Dow Jones retreated by around 150 points. The primary pressure stemmed from rising borrowing costs, prompting investors to exercise caution regarding high-valuation stocks.
Long-term US Treasury yields continued to climb to multi-year highs. This rise was driven by inflation concerns, heavy bond issuance, and increasing corporate funding needs linked to AI infrastructure expansion. These conditions led the market to price in a higher long-term risk premium.
Inflation risks also intensified alongside rising energy prices. Sentiment heated up after the US signaled that the blockade on Iranian oil exports could persist, causing the market to factor in potential supply disruptions and upward pressure on energy costs.
Technology and AI stocks were among the hardest hit. Nvidia, Meta, Tesla, and Oracle saw declines of up to approximately 3%. The financial sector also weakened, with Goldman Sachs and JPMorgan trading in the red as rising yields and tight credit conditions weighed on sentiment.
Conversely, Home Depot managed to buck the trend, rising about 1%. This gain was supported by earnings results that exceeded expectations, even as the company continued to face high cost pressures.
Newsmaker Analysis: Wall Street is currently facing pressure from a combination of high yields, energy-related inflation risks, and steep valuations for tech stocks. As long as Treasury yields remain elevated, the Nasdaq is likely to remain the most sensitive index. However, strong earnings reports could still provide selective support for specific stocks. (gn)
Source: Newsmaker.id
