Wall Street tumbles as stocks fall toward their worst day in a month

By STAN CHOE, AP Business Writer

NEW YORK (AP) — Wall Street is tumbling Tuesday as rising pressure from the bond market pulls U.S. stocks further from their records.

The S&P 500 sank 1.4% and was on track for its worst day in a month. The Dow Jones Industrial Average was down 516 points, or 1.1%, as of 12:30 p.m. Eastern time, and the Nasdaq composite was 1.7% lower. All three are still relatively close to their recently set all-time highs.

Big Tech companies were some of the heaviest weights on the market. They’ve been soaring for years on expectations that they’ll continue to dominate the economy, but they also shot so high that critics say their prices became too expensive.

Nvidia, whose chips are powering much of the world’s move into artificial-intelligence technology, fell 3.6% and was the single strongest force pulling the S&P 500 lower. Amazon sank 2.2%, and Alphabet dropped 2.5%.

The overall stock market felt pressure from rising yields in the bond market, where the 10-year Treasury yield climbed to 4.27% from 4.23% late Friday. When bonds are paying more in interest, investors are less willing to pay high prices for stocks.

Longer-term bond yields are on the rise around the world, in part because of worries about how difficult it will be for governments to repay their growing mountains of debt.

In the United States, longer-term Treasury yields are feeling added pressure from President Donald Trump’s attacks on the Federal Reserve for not cutting interest rates sooner. The fear is that a less independent Fed will be less likely to make the unpopular decisions needed to keep inflation under control over the long term, such as keeping short-term rates higher than investors would like.

Tuesday was also the first opportunity for trading after a federal appeals court ruled late Friday that Trump overstepped his legal authority when announcing sweeping tariffs on almost every country on Earth, though it left the tariffs in place for now.

Tariffs have certainly created confusion across the global economy and may have hurt the U.S. job market. But less income from them could also force the U.S. government to borrow more to pay its bills, according to Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

In another signal of increasing worries in financial markets, the price of gold rose 2% after touching a record. The metal has often provided a haven for investors in times of uncertainty.

Treasury yields briefly trimmed their gains after a report on Tuesday said U.S. manufacturing shrank by more last month than economists expected. Many companies told the Institute for Supply Management that tariffs are continuing to make conditions chaotic.

“Too much uncertainty for us and our customers regarding tariffs and the U.S./global economy,” said one company in the chemical products industry said, while noting that orders across most product lines have weakened.