WASHINGTON (dpa-AFX) - Following the pullback seen over the two previous sessions, stocks are seeing further downside during trading on Tuesday. The major averages have all moved lower on the day, with the tech-heavy Nasdaq showing a significant decline.
Currently, the Nasdaq and S&P 500 are just off their lows of the session. The Nasdaq is down 361.19 points or 1.4 percent at 26,283.72 and the S&P 500 is down 46.95 points or 0.6 percent at 7,698.11.
The narrower Dow is well off its worst levels and posting a more modest loss, down 47.16 points or 0.1 percent at 53,412.62.
The weakness on Wall Street comes amid worries about a recent increase in bond yields, with the 30-year bond yield reaching its highest levels in nearly two decades.
Treasury yields have moved to the upside amid lingering concerns about the outlook for inflation due to the ongoing conflict in the Middle East.
U.S. crude oil futures are rising 0.4 percent after surging by 2.6 percent on Monday due to fading hopes of a peace deal between the U.S. and Iran.
Daniela Hathorn, Senior Market Analyst at Capital.com noted the increase in treasury yields comes 'despite softer recent economic data reducing expectations for an imminent Fed hike.'
'Instead, the long end is responding to persistent inflation risks, heavy government borrowing and growing competition for capital-including debt issuance associated with the AI investment boom,' Hathorn said.
She added, 'That creates an uncomfortable environment for equities because financial conditions can tighten even without the Fed raising rates.'
In U.S. economic news, the Federal Reserve released a report showing industrial production in the U.S. rose by slightly less than expected in the month of July.
The Fed said industrial production crept up by 0.2 percent in July after climbing by an upwardly revised 0.3 percent in June.
Economists had expected industrial production to increase by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.
Sector News
Semiconductor stocks have shown a substantial move to the downside on the day, resulting in a 5.6 percent nosedive by the Philadelphia Semiconductor Index.
Considerable weakness is also visible among networking stocks, as reflected by the 3.6 percent plunge by the NYSE Arca Computer Hardware Index.
Computer hardware, gold and airline stocks are also seeing significant weakness, while pharmaceutical and healthcare stocks have shown strong moves to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index plunged by 2.5 percent, while China's Shanghai Composite Index rose by 0.2 percent.
The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is up by 0.4 percent, the German DAX Index and the French CAC 40 Index are both down by 0.6 percent.
In the bond market, treasuries have moved modestly higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 4.712 percent.
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