2026.09.1520:06:54UTC+00US Stocks Drop as Yields Extend Surge

US stock indices closed lower on Tuesday, pressured by a renewed surge in bond yields. The S&P 500 slipped 0.4%, the Dow Jones Industrial Average dropped 328 points, and the Nasdaq Composite declined 0.6%. The benchmark 10-year Treasury yield climbed to its highest level in nearly two decades.

Intensifying strikes in the Middle East further clouded the outlook for regional energy supplies, heightening inflation risks and reinforcing expectations of a more hawkish Federal Reserve. With higher fuel costs contributing to this year’s inflationary pressures, markets are pricing in a 25 bp rate hike at tomorrow’s Fed meeting.

Losses were broad-based, with credit-sensitive AI hyperscalers coming under pressure from rising borrowing costs. Alphabet fell 1.3%, Microsoft lost 1.6%, Oracle dropped 3.1%, and Amazon declined 2%. By contrast, chipmakers mostly rebounded after Monday’s selloff, triggered in part by Anthropic CEO Dario Amodei’s call to slow AI development to address risks from increasingly powerful models. Nvidia gained 0.6%, while AMD advanced 2.2%.