US stock market today: Wall Street pulls back from record highs as AI-related stocks drop

Technology  shares have swung sharply this summer as investors question whether valuations have risen too far.

US stock market today: Wall Street benchmarks moved further away from their record high on Tuesday as technology shares related to the artificial-intelligence boom came under renewed selling pressure.The S&P 500 declined 0.5%, putting it on course for a third consecutive modest drop since reaching its all-time high on Thursday. As of 9:35 a.m. Eastern time, the Dow Jones Industrial Average was down 131 points, or 0.2%, while the Nasdaq Composite had fallen 1.1%.

AI stocks under pressure

The decline was led by several of the market’s biggest recent winners, particularly companies that have benefited from the surge in artificial-intelligence spending, according to an AP report.Their shares have swung sharply this summer as investors question whether valuations have risen too far and whether demand for memory, processors and other data-centre components can remain strong if AI fails to generate the level of profits investors are expecting.Micron Technology fell 3.5%, making the computer-memory maker one of the biggest drags on the S&P 500. Chipmakers Nvidia and Broadcom also weighed on the index, falling 1.6% and 2.2%, respectively.Despite the recent volatility, these stocks remain among the market’s strongest performers this year. Micron, for instance, has gained more than threefold.However, highly valued stocks tend to face greater scrutiny when borrowing costs are moving higher, and bond yields remained elevated across global markets on Tuesday.

Treasury Yields

The yield on the 10-year US Treasury was unchanged at 4.72%, matching its level at the end of Monday’s session. It remains considerably above the 3.97% recorded before the war with Iran began. Meanwhile, the yield on the 30-year Treasury was hovering close to its highest level since 2007.Treasury yields have climbed sharply since the war began, as elevated oil prices have added to inflationary pressure and increased expectations that the Federal Reserve and other central banks may need to raise interest rates. At the same time, concerns over governments carrying large debt burdens and continuing to borrow heavily have kept bond yields elevated.Although the bond market often operates away from the spotlight, movements in yields can have a significant impact on financial markets and policymakers around the world, including President Donald Trump. When yields rise, investors tend to become less willing to pay high valuations for stocks and other assets, particularly those already considered expensive.

Oil prices rise

Oil prices have been an important factor behind the rise in yields. Brent crude increased 0.6% to $91.45 a barrel. Prices have remained highly volatile as markets assess when, or even whether, the United States and Iran can reach an agreement that would allow oil tankers to resume unrestricted passage out of the Persian Gulf.Global stock markets delivered a mixed performance across Europe and Asia.South Korea’s Kospi, where two technology heavyweights, Samsung Electronics and SK Hynix, dominate the market, has experienced some of the world’s most pronounced swings linked to the AI boom. The index declined 1.5% on Tuesday, a relatively moderate move by its recent standards. In each of the previous three sessions, it had moved by at least 2.4%.