U.S Stocks fall as soaring yields crush tech rally and chip stocks lead brutal slide

This article first appeared on GuruFocus.

U.S. stocks declined on Tuesday as a surge in Treasury yields weighed on technology and consumer-linked shares, while semiconductor stocks led losses across major benchmarks.

The S&P 500 fell 0.8% and the Nasdaq Composite dropped 1.1%, extending a three-session losing streak. The 30-year Treasury yield climbed to 5.198%, its highest level in nearly two decades, as inflation concerns tied to energy prices and geopolitical tensions resurfaced, pressuring rate-sensitive assets. Federal Reserve policy uncertainty ahead of leadership transition also added to rate volatility, raising borrowing costs for mortgages and credit.

The Philadelphia Semiconductor Index slipped 1.4%, with investors rotating out of chipmakers ahead of Nvidia earnings, due this week. Qualcomm and Broadcom also retreated as valuation concerns persisted following a recent rally in AI-linked names. The pullback also reflected profit-taking after a strong year-to-date AI-driven rally across semiconductor stocks.