Stocks slid for a third straight session Tuesday morning, and the reason sits in the bond market: the U.S. government now has to pay more to borrow money for 30 years than at any point since 2007. When safe government bonds pay that much, investors have less reason to hold expensive stocks — and the most expensive stocks, the technology names, get sold first.
The 30-year Treasury yield rose about two basis points to 5.32%, a 19-year high. The 10-year note, the benchmark that sets mortgage and auto loan rates, sat near 4.73%. The two-year, which tracks Federal Reserve policy most closely, held around 4.19%.
The Nasdaq Composite led the decline, falling roughly 1%. The S&P 500 was off about 0.5% and the Dow Jones Industrial Average traded near flat to down 150 points. On Monday the Dow closed at 53,459.78, the S&P 500 at 7,745.06 and the Nasdaq at 26,644.91. That leaves all three lower on the week after the S&P set a record above 7,800 five sessions ago.
Oil is the second pressure point. Brent crude climbed above $91 a barrel and U.S. West Texas Intermediate topped $85, both rising for a third consecutive day. The 60-day understanding between Washington and Tehran expired Monday without an extension, and President Trump said he is not interested in renewing it. Iranian officials responded that Tehran may shift to a fully offensive posture if talks fail. Trump also warned Oman against interfering with U.S. plans for the Strait of Hormuz, which remains effectively closed. Every dollar oil gains flows into shipping, food and airfare costs weeks later, which is why the bond market treats it as an inflation story.
Among the movers, Caterpillar fell 2.9% and Nvidia dropped 1.9%, with Meta, Tesla and Oracle down as much as 3%. Goldman Sachs and JPMorgan traded lower as higher rates squeezed lending economics. On the winning side, Johnson & Johnson rose 2.3%, IBM added 1.4% and Chevron gained 1.4% on the oil move. Klarna plunged more than 20% after trimming its guidance.
Home Depot was the morning’s bright spot, gaining about 1% after beating on both sales and profit. The retailer reported second-quarter sales of $47.86 billion, up 5.7% from a year ago, with net earnings of $4.8 billion, or $4.79 per diluted share, against $4.58 a year earlier. Adjusted earnings came to $4.92 per share, ahead of the $4.73 Wall Street expected. Comparable sales rose 1.7%, the company’s best figure since late 2022.
The detail worth reading twice: shoppers spent more per visit but came in less often. The average ticket rose 2.8% to $92.50 while transactions slipped 1%. Chief Financial Officer Richard McPhail described the backdrop as frozen housing conditions. Homeowners sitting on 6.5% mortgages are not selling — they are fixing what they already own. Home Depot also collected $730 million in tariff refunds during the quarter and put $685 million of it straight toward lowering product costs, which is how the company held its full-year outlook steady despite higher fuel and energy bills.
Gold eased and the dollar was little changed. Behind the yield move sits a fiscal problem more than an inflation one: strategists point to the widening federal deficit and the flood of new corporate debt from artificial intelligence companies, all competing for the same buyers. Last week’s Treasury auctions told the story — 10-year notes cleared at 4.683%, a 19-year high, and 30-year bonds stopped at 5.216%, the worst in a quarter century.
Walmart, Target and Lowe’s report later this week, and minutes from the Fed’s last meeting are due. After July retail sales fell 0.6% and consumer sentiment dropped to 51.0 from 55.2, those results will say more about the American household than any index level does.
JBizNews Desk | Wall Street
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