Wall Street opened lower on Tuesday, with major indices declining as a sell-off in technology shares deepened. According to Business-Today, the Dow Jones Industrial Average fell 197.69 points, or 0.38%, to 51,515.02 in early trading. The Nasdaq Composite dropped 365.57 points, or 1.40%, to 25,801.03, leading losses. The S&P 500 declined 76.49 points, or 1.02%, to 7,396.30, and the DJ Total Stock Market Index fell 733.07 points, or 0.99%, to 73,385.98.
Technology Sector Rout
Large-cap technology stocks were under heavy pressure. Business-Today reported that Alphabet, Nvidia, Oracle, and Tesla all opened sharply lower. Chipmaker Micron Technology dropped more than 11%, while Intel was down over 7% in overnight trading. Qualcomm fell 6.3%, and memory and storage firms were also hit: Sandisk slid nearly 9% and Seagate declined 7.2%. The sell-off extended to Elon Musk's SpaceX, which slipped another 1% before the bell after a 16.4% fall earlier in the week. SpaceX was just above $156 per share, down from highs above $200 the prior week, though still above its market debut level.
Global Contagion
The weakness in US markets followed a global downturn that began in Asia. Business-Today noted that South Korea's Kospi tumbled 10% to 8,203.84, dragged down by semiconductor stocks such as Samsung Electronics and concerns over regulatory scrutiny. Japan's Nikkei 225 fell 3.6% to 69,788.38, while Australia's S&P/ASX 200 declined 0.3% to 8,787.00. European markets also moved lower: France's CAC 40 fell 0.6%, Germany's DAX lost 1%, and Britain's FTSE 100 slipped 0.5%.
Rate Hike Expectations and Bond Markets
According to Business-Today, the ongoing sell-off has been driven by growing concern over heavy spending in artificial intelligence and the increasing likelihood of interest rate hikes in the United States, which could slow growth and raise borrowing costs. Traders are now pricing in nearly a 90% chance of at least one rate hike by the end of the year, up from 57% a week earlier, based on CME Group data.
| Metric | Current | Prior Week | Prior to Iran War |
|---|---|---|---|
| 10-Year US Treasury Yield | 4.49% | 4.43% | 3.97% |
| Probability of at least one rate hike by year-end | ~90% | 57% | — |
The bond markets reflected uncertainty, with the yield on the 10-year US Treasury settling around 4.49%, compared with 4.43% a week earlier and 3.97% before the Iran war. Economists expect US consumer inflation data due on Thursday to show an increase to 4.1% in May from 3.8% in April.
Commodities and Trade Implications
On the commodity front, oil prices were largely steady to slightly lower, with US crude at $73.77 a barrel and Brent crude at $77.71, trading below $78. Business-Today reported that the move followed the US decision on Monday to waive longstanding sanctions on Iranian oil sales for two months, signalling progress in talks between Washington and Tehran.
The broader weakness in equities comes as the recent artificial intelligence-led rally reverses, with investors reassessing valuations amid higher rate expectations and concerns about tighter monetary policy on global growth. For trade finance professionals, rising US interest rates increase borrowing costs for working capital and trade credit, while a global economic slowdown could dampen trade volumes. The higher probability of rate hikes also strengthens the US dollar, affecting export competitiveness for trade-dependent economies.
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