Wall Street Slams Brakes as Tech Tanks and Bond Yields Soar

Hang on tight, folks! Wall Street took a wild ride Tuesday as investors hit the eject button on tech stocks, and soaring bond yields cranked up the heat on the market. It was like watching a high-speed chase come to a screeching halt.

The Dow Jones Industrial Average took a nosedive, dropping 114.83 points, or 0.27%. Meanwhile, the S&P 500 wasn't far behind, dipping 0.39% and snapping its six-day winning streak like a twig.

The Nasdaq Composite got rocked too, sliding 0.38% as chipmakers and mega-cap stocks like Nvidia, AMD, Meta, Apple, and Microsoft led the charge downhill. The tech sector? It was the S&P 500's biggest loser, plummeting nearly 0.9%.

This pullback comes hot on the heels of a five-week rally that sent the S&P 500 soaring more than 20% from its April low. Investors were riding high on hopes of tariff de-escalation after President Trump's earlier tariff announcement. But now, the index is just 3% shy of its all-time high, and the ride's getting bumpy.

"We've had the tariff tantrum, the crazy comeback, and now we're left hanging, waiting for some real answers," said Bill Northey of U.S. Bank Wealth Management. "It's like we're all hyped up, but nobody knows what's coming next."

And if that wasn't enough to make your heart race, the bond markets are adding fuel to the fire. The 10-year Treasury yield shot up to 4.48%, while the 30-year briefly hit 5% for the second day in a row—its highest since November 2023. Talk about a wild ride!

This surge came right after Moody's decided to downgrade U.S. debt, pointing fingers at ballooning deficits and skyrocketing interest expenses.

Equity Valuation Challenges

Analysts are sweating bullets, saying that yields at or above 4.5% could throw a wrench in equity valuations. "If the 30-year is breaking out, does that mean the rest of the curve is about to follow suit?" asked Manulife's Matthew Miskin, looking like he just saw a ghost.

Morgan Stanley's Michael Wilson added that equities always seem to feel the squeeze when the 10-year yield crosses the 4.5% threshold.

In other news, Tesla shares got a 2% boost after Elon Musk doubled down on his commitment to stick around as CEO for at least five more years. And on the political front, President Trump couldn't win over GOP holdouts on a key tax bill, putting its passage before Memorial Day in serious jeopardy.