US stocks slipped on Tuesday as a sell-off in government bonds spilled into equities, extending recent declines for tech shares.
The S&P 500 fell 0.9% in early trading following the long Labor Day weekend, while the tech-heavy Nasdaq Composite dropped 1.1%. European markets also saw losses, with the Stoxx Europe 600 down 1.1% and Germany’s DAX sliding 1.7%, News.Az reports, citing foreign media.
Investors remain cautious amid rising US Treasury yields and concerns over growing debt levels in major economies. “The risk-off sentiment today reflects broader market unease stemming from the bond market,” said Marija Veitmane, head of equity research at State Street Global Markets.
Tech stocks, which have driven US market gains this year, showed signs of pressure. Nvidia, which represents 8% of the S&P 500, fell 2% on Tuesday after last week’s 3.8% drop, following a revenue forecast below market expectations.
Bond yields continue to climb globally, with the 10-year US Treasury yield up 0.04 points to 4.27%. Uncertainty over the Federal Reserve’s independence, amid US President Donald Trump’s attempt to remove governor Lisa Cook, has added to the pressure. Gold prices hit record highs as investors sought safer alternatives.
In Europe, the 10-year German bond yield rose to 2.79%, and the 30-year yield reached its highest level since 2011, after Eurozone inflation exceeded expectations. Emmanuel Cau, head of European equities strategy at Barclays, noted that stock moves were “largely due to bond market spillover, with concerns about deficits and sticky inflation resurfacing.”
Germany’s stock market has outperformed peers this year, fueled by the government’s “whatever it takes” stimulus package, which boosted investor confidence in infrastructure and defense sectors.
