The U.S. stock market stumbled on Tuesday as traders returned from the Labor Day holiday to face renewed uncertainty over tariffs, surging bond yields, and weakness in the technology sector.
The Dow Jones Industrial Average shed nearly 400 points (0.9%), pressured by steep losses in Nike and NVIDIA, while the S&P 500 and Nasdaq Composite also closed sharply lower, down 0.9% and 1.7% respectively.
The downturn marked Wall Street’s worst single-day performance in almost a month.
Bond Yields and Policy Clouds Pressure Markets
Investors were rattled by a jump in U.S. Treasury yields, with the 10-year yield climbing to 4.28%, intensifying concerns over borrowing costs and corporate profitability.
At the same time, markets are digesting a federal appeals court ruling that deemed most of former President Donald Trump’s reciprocal tariffs unconstitutional, though they remain in place pending a likely Supreme Court appeal.
This legal limbo has injected fresh volatility into the Dow Jones stock markets, especially in trade-sensitive sectors, with investors hesitant to make big bets until policy clarity emerges.
Tech Stocks Lead Losses
Technology shares bore the brunt of Tuesday’s sell-off. NVIDIA, a key Dow component, dropped more than 2.5%, dragging down the broader semiconductor sector.
Heavyweights Apple, Amazon, Microsoft, Tesla, and Alphabet also lost ground, each slipping close to 1%.
The VanEck Semiconductor ETF tumbled nearly 2% as chipmakers including Arm Holdings, Lam Research, and ON Semiconductor posted losses between 3% and 5%.
Analysts warned that valuations in the tech sector, which drove much of this year’s rally, are increasingly vulnerable to higher interest rates.
Bright Spots Amid the Downturn
While Wall Street’s major indexes fell, several companies bucked the trend:
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PepsiCo rose 1.5% after activist investor Elliott Management disclosed a $4 billion stake.
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Ralph Lauren gained 4%, reaching a new high on strong retail momentum.
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Iren, a bitcoin mining company, surged over 8% following robust quarterly results.
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Ionis Pharmaceuticals soared 33% after positive data from a key drug trial.
Safe-haven assets also rallied. Gold prices hit a record high of nearly $3,600 per ounce, reflecting heightened demand for defensive investments. Meanwhile, oil climbed to $65.55 per barrel, marking its strongest level in a month.
Outlook: Data and the Fed in Focus
Market participants are now shifting attention to upcoming economic indicators, including the closely watched August jobs report, which could influence the Federal Reserve’s interest rate decision later this month.
Corporate earnings from Broadcom, Salesforce, and several AI-focused firms are also expected to shape sentiment in the days ahead.
Despite Tuesday’s losses, strategists caution against declaring the bull run over, noting that market corrections are typical during periods of policy uncertainty and rising yields.
“Investors are recalibrating expectations,” said one New York-based portfolio manager.
“The Dow Jones stock markets are showing that risk appetite is thinning, but if jobs data points to easing inflationary pressures, we could see a swift rebound.”
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