Stocks on Wall Street declined on Tuesday, influenced by a sell-off in major technology stocks. Concerns about possible interest rate hikes by the end of the year added pressure. The S&P 500 fell 0.9% after gaining in 11 of the last 12 weeks, driven mainly by tech stocks. The Dow Jones Industrial Average dropped slightly by 8 points, less than 0.1%, as of 10:42 a.m. Eastern. The Nasdaq composite saw a 1.4% decrease.
Markets across Asia faced declines, with South Korea’s Kospi plummeting 10%. European stocks also experienced a downturn. Technology stocks led market declines, particularly those boosted by artificial intelligence hype. High stock valuations in tech give them substantial influence over market trends. Although more S&P 500 stocks rose than fell, tech declines overshadowed other gains. Micron Technology dropped 9.7%, while Nvidia decreased by 2.6%. In South Korea, Samsung Electronics fell by 12.3%.
SpaceX fluctuated but remained up by 1.8%. The company, which focuses on space exploration and AI, had an impressive market debut recently. It plans to raise funds through a bond offering, partly for AI development. The possibility of rate hikes has curbed recent gains in AI-related stocks, as traders fear higher rates might limit economic growth. Tech stock rallies have significantly boosted major indexes throughout 2026. The S&P 500’s tech sector alone rose 27% in three months and 18% for the year. South Korea’s Kospi has almost doubled in 2026.
Technology companies are heavily investing in AI technology. Higher interest rates could impact future spending and investment prices. The Federal Reserve suggested a potential rate increase by year-end. Wall Street bets on an 85% likelihood of a rate hike, up from 60% a week ago. The 10-year Treasury yield decreased to 4.49% from 4.51%, and the 2-year Treasury yield fell to 4.20% from 4.24%.
Worries about inflation keep bond yields high. Inflation has grown throughout the year, partly due to tariffs. The U.S. war with Iran has driven energy prices, particularly gas, upwards. Increased energy costs make shipping goods more expensive, affecting businesses and households.
In June, a report showed a 4.2% rise in consumer prices from a year earlier, the highest in three years. Another report, expected Thursday, anticipates a favored Fed inflation measure rising to 4.1% in May. Oil prices decreased amid U.S.-Iran war negotiations, with U.S. crude prices falling 1.7% to $72.60 per barrel and Brent crude, the international standard, dropping 1.7% to $76.54. Despite this, prices remain higher than pre-war levels of around $70 per barrel.
AP Senior Producer Mayuko Ono in Tokyo contributed to this report.