US open: Stocks slip as bond yields hit 16-month high

(Sharecast News) - Weakness in the tech sector dragged US stock markets lower on Tuesday morning in New York as bond yields continued to climb to a 16-month high, while investors awaited earnings from Nvidia.

All three of Wall Street's benchmark indices were trading 0.4% lower 30 minutes after the opening bell, with the S&P 500 and Nasdaq falling for the third straight day after hitting record highs last Thursday.

The yield on a 10-year US Treasury note was 5.8 basis points higher at 4.651%, hitting highs not seen since January 2025.

"Bear in mind that this key yield was below 4.0% in February this year and stood at 4.25% this time last month," said David Morrison, senior market analyst at Trade Nation. "Investors weighed concerns over higher bond yields, as well as the outlook for AI demand and rising layoffs across tech. Of course, this could be simply some mild profit-taking given the outsized gains in chipmakers since the end of March."

The economic data calendar for Tuesday was looking relatively light, with pending home sales for April the only major release of the day, due out at 1500 BST. The consensus estimate points to a 1% increase in sales for the month, following a 1.5% gain in March.

Meanwhile, investors were keeping a close eye on developments in the Middle East amid tentative hopes of a peace deal between the US and Iran.

Donald Trump, who had warned Iran at the weekend that the "clock is ticking" to propose an adequate deal to end the war, said on Monday that a planned attack on the country had been paused. Following the request of leaders of Qatar, Saudi Arabia and the UAE, Trump said that "serious negotiations are now taking place".

Nvidia itself was trading slightly lower after the opening bell, having now lost around 6% over the past three sessions combined. Sector peers Intel, Broadcom, Micron Technology and AMD were falling early on.

"We could see US tech stocks drift on Tuesday as we wait for Wednesday's earnings report from Nvidia. The chip giant's outlook for sales and its assessment of the uptake of enterprise AI will be vital for the next stage of the tech trade. For now, US stocks futures are lower," said Kathleen Brooks, research director at XTB.

Elsewhere in the tech sector, Alphabet was in the red on reports that Google and Blackstone plan to launch a new AI cloud company backed by an initial $5bn equity investment, as demand for computing capacity continues to surge across the AI industry.

Even United Airlines fell despite saying it expects an uptick in passenger numbers this summer. The carrier projected 53m travellers over the peak summer period, up 3m from last year.