US stock markets opened in deep red on Tuesday as investors worried that tightening financial conditions would hamper economic growth. The NASDAQ 100 notched its worst day in two weeks, dropping 1.3% after sliding as much as 1.7%, while the S&P 500 Index fell 0.7% with seven of its 11 major industry groups declining. As reported by NDTV, the semiconductor and chip maker pack declined 2.1%, with Nvidia Corp. falling 1.5% Tuesday, following a 2.6% slide after the opening bell, Advanced Micro Devices Inc. falling 2.4%, and Micron Technology Inc. declining 2.6%. Consumer discretionary was the worst performer while energy led gains, with SanDisk Corp. - among the best S&P 500 performers in 2026 - slumping 1.9%. At the stock specific level, Apple Inc. rose 2.6% as the company's new chief executive John Ternus took the helm of the tech giant, ending Tim Cook's 15-year tenure, with shares trading at $328 apiece on the NASDAQ at a $4.72 trillion valuation.
The S&P 500 is starting to look increasingly bearish below 7,600-7,648, with 7,500 and 7,324 as downside levels, while resistance sits at 7,674 and 7,724. As reported by Investing.com, the S&P 500 futures have already made a lower high at 7,782, relative to its all-time high at 7,838 that was hit in mid-August. If the index breaks below the 7,600-7,648 zone, that would be a bearish technical development, potentially leading to follow-up selling towards 7,500 next, and below that the July low of 7,324. On the upside, resistance is seen around 7,674, marking Monday's low, with 7,724 as the next resistance level. Rising bond yields are increasing the opportunity cost of holding stocks and putting particular pressure on higher-valued, long-duration sectors such as technology. The market increasingly appears willing to test the authorities' tolerance for higher borrowing costs, with US debt now above $40 trillion.
Monday's session was dominated by a tech-led pullback after megacap stocks dragged indexes lower, with Alphabet falling 5% on AI concerns over high-profile exits, Amazon dropping nearly 5%, Meta losing 2.3%, and Microsoft declining 3%. The selloff extended beyond major tech names, with SpaceX plunging 16% for its third straight session and extending its three-day slide to nearly 24% after an initial post-IPO rally. SpaceX also announced a senior unsecured notes offering, while Bloomberg reported that the company is seeking to raise at least $20 billion in investment-grade debt to fund AI ambitions. Palantir Technologies (PLTR) fell nearly 7% on Monday to $119.50, closing at its lowest level in more than a year amid broader software and AI-disruption worries. However, chip stocks offered some relief, with Micron rising nearly 7% ahead of earnings, AMD gaining more than 2% and Intel adding 5%. D-Wave Quantum (QBTS) shares rose 7% overnight, extending the quantum-stock rally sparked by White House executive orders, while Hims & Hers Health (HIMS) snapped a four-session winning streak and ended 5% lower after rival LifeMD announced an exclusive telehealth program. Nvidia shares slipped 4.6%, while Marvell Technology tumbled 10.3% on doubts over the timing of revenue from its AI chip agreement with Alphabet's Google, despite the company raising its 2027 revenue forecast.
Stocks slipped midday after Federal Reserve Chairman Kevin Warsh delivered a speech that soothed investor concerns about the central bank's willingness to tackle inflation, while traders bet on a higher likelihood of interest-rate hikes this year. As reported by Reuters, Warsh's remarks came at the end of a week that had already kept markets focused on the outlook for interest rates, with corporate results from Nvidia and Salesforce adding another layer to investor sentiment. "We were encouraged by Warsh's speech. But talk is cheap," Aditya Bhave, head of U.S. economics research at Bank of America, said in a note, according to Reuters. Bhave said Warsh would need to deliver a rate hike in September unless August jobs and inflation data came in very soft, as he probably would lose credibility. Traders are now split between a rate hike and a hold in September, as they were before inflation data this month painted a mixed picture. Fed Chair Warsh's hawkish Jackson Hole speech has already put a September rate hike firmly back on the table, with the 10-year bond yield climbing to a fresh 19-month high and the 30-year yield pushing through recent highs. The 30-year yield has also broken above 4.18%, a record, triggering worries about the unwinding of the yen-funded carry trade. Fed Chairman Warsh noted that additional monetary policy steps may be needed if inflation does not fall to the target level, reinforcing the central bank's commitment to its inflation target.
Oil prices rose on news the US launched a fresh wave of strikes against targets in Iran and the Islamic Republic said it retaliated, with WTI crude spiking above $90 a barrel amid escalating geopolitical tensions. As reported by NDTV, higher energy prices have fueled already stubbornly high inflation, well above the Fed's 2% target. Iran said the Strait of Hormuz "will never return to its previous state before the war," while Tehran also pushed back on new nuclear commitments, saying it "has not accepted any new commitments." Vice President JD Vance said the talks made "a lot of good progress" and had laid "a very good foundation for a successful final deal." Oil prices were retreating from their overnight highs after the US and Iranian forces traded strikes on each other, but WTI still held near $90 per barrel during early European trade. Higher oil prices are reigniting inflation worries, raising the risks of tighter monetary policy – not just in the US but across the developed world. September has traditionally been the weakest month for US stock returns, with the S&P 500 losing 0.8% on average in September over the past three decades, contrasting with an average 0.9% gain for the other 11 months. Despite Tuesday's bond selloff, Wall Street's chief fear gauge - the Cboe Volatility Index, or VIX, remained around 16 - a level that doesn't typically signal market stress.
