NEW YORK (AP) — Wall Street is moving further away from its all-time high on Tuesday as AI stocks sink again. The S&P 500 fell 0.5% and is on track for a third straight modest loss since hitting its all-time high on Thursday. The Dow Jones Industrial Average was down 33 points, or 0.1%, as of 10:15 a.m. ET, and the Nasdaq composite was down 1.3%. Leading the decline were stocks that have been big winners in the boom around artificial intelligence technology. They have been going up and down this summer on concerns that their prices have risen too high in the AI frenzy and that strong demand for memory, processors and other data center building blocks could evaporate if AI proves less profitable than promised. Micron Technology fell 5.9%, and the computer memory seller was one of the heaviest weights on the S&P 500. So were chip companies Nvidia, which fell 2.5%, and Broadcom, which sank. 3.7%. Even with its recent swings, these stocks are still the big winners, and Micron has more than tripled this year. But stocks that critics consider too expensive receive greater scrutiny when interest rates are high, and yields stayed that way in bond markets around the world on Tuesday. The yield on the 10-year U.S. Treasury bond fell to 4.71% from 4.72% late Monday. But it remains well above its level of 3.97% just before the war with Iran began. The yield on the 30-year Treasury bond also fell, but is still near its highest level since 2007. Yields have risen since the war began because high oil prices are pushing up inflation and increasing pressure on the Federal Reserve and other central banks to raise interest rates. Meanwhile, continued concerns about governments’ huge debt burdens and increases in borrowing are keeping yields high. The bond market often operates in the background, but is powerful enough to influence markets and government leaders around the world, including President Donald Trump. When yields are high, investors are less willing to pay high prices for stocks and other types of investments, particularly those considered the most expensive. Much of the pressure on yields comes from oil prices, with the price of a barrel of Brent crude rising 0.1% to $91.00. It has been swinging wildly due to uncertainty over when and whether the United States and Iran will be able to reach a deal to allow oil tankers to leave the Persian Gulf freely again. The price of Brent was $72.87 just before the start of the war. High yields have already pushed the average long-term mortgage rate in the United States near its highest level in a year, hurting the real estate industry. A report Tuesday said homebuilders broke ground on fewer new homes last month than economists expected. Subscribe to Morning Wire: Our flagship newsletter breaks down the day’s biggest headlines. This data helped rein in Home Depot shares, which rose 0.8% after reporting stronger earnings and revenue for the latest quarter than analysts expected. Chief Financial Officer Richard McPhail said Home Depot saw its customers continuing to pursue smaller projects. High yields could also curb the huge borrowing that big tech companies are taking on to pay for data centers, putting at risk one of the great sources of growth for the US economy. Elsewhere on Wall Street, Klarna fell 20.5% even though the payments company reported stronger results last quarter than analysts expected. The buy now, pay later company cut some of its financial forecasts for the full year 2026, largely due to expectations for Germany, its largest market by volume. Meta Platforms fell 3.8%, and opening statements will begin in a pivotal trial in federal court in California, where states are seeking billions of dollars in damages for harm caused to children on social media. In foreign stock markets, indices were mixed in Europe and Asia. South Korea’s Kospi has been home to some of the world’s most pronounced AI-induced swings because it is dominated by two tech giants, Samsung Electronics and SK Hynix. The index fell 1.5%, which for him is a relatively modest move. It had swung at least 2.4% on each of its previous three days.___AP Business Writer Yuri Kageyama contributed to this report.
