U.S. stock futures came under pressure on Tuesday as rising Treasury yields and higher oil prices renewed concerns about inflation and the outlook for interest rates. S&P 500 futures fell 0.4%, while Nasdaq-100 futures dropped 1.1%, pointing to a weaker opening on Wall Street. A sharp decline in semiconductor stocks added to the pressure, with several major technology names recording notable losses before the market opened.
Technology and chip stocks were among the biggest early decliners. Western Digital fell more than 5%, while Sandisk dropped over 4%. Marvell Technology and Seagate Technology also lost more than 5%, highlighting renewed caution around high-growth technology stocks. The Dow Jones futures, however, held up better, slipping just 0.1%, helped partly by a roughly 1% rise in Home Depot after the retailer reported stronger-than-expected second-quarter earnings.
A major concern for investors was the continued rise in long-term U.S. Treasury yields. The 30-year Treasury yield climbed nearly two basis points to 5.329%, remaining around levels last seen nearly two decades ago. Higher bond yields can put pressure on stock valuations, particularly expensive growth and technology shares, as investors reassess the returns available from riskier assets.
Oil prices have added another layer of uncertainty. U.S. crude rose 0.7% on Tuesday to trade above $85 a barrel, following gains the previous day. Investors are watching developments involving the United States and Iran closely, as stalled negotiations and growing geopolitical tensions could keep energy prices elevated. A prolonged increase in oil prices could make it harder for inflation to cool, potentially keeping pressure on interest rates and financial markets.
The weakness was not limited to the United States, with several major European and Asian markets also trading lower. The pan-European Stoxx 600 fell 0.51%, while Germany’s DAX, France’s CAC 40 and Italy’s FTSE MIB also declined. In Asia, Japan’s Nikkei 225 dropped 2.54% and South Korea’s Kospi fell 1.55%. With rising yields, expensive oil and geopolitical uncertainty weighing on sentiment, investors are now watching closely to see whether the recent market resilience can continue or whether higher borrowing costs will begin to take a bigger toll on global stocks.
source: cnbc
