Closing Bell: A Sea of Red on Chip Selloff, Stalled U.S.-Iran Negotiations

U.S. stocks moved lower Tuesday as bond yields hit multi-decade highs on concern about persistent inflation including the elevated price of oil. 

A semiconductor pullback, with the Philadelphia Semiconductor Index (SOX) down nearly 5%, also weighed on the broader market. The S&P 500 (SPX) was down 0.69%, and the Dow Jones Industrial Average ($DJI) fell 0.22%. The small-cap Russell 2000 (RUT) slipped by 1.3%. Tech led the slide on Tuesday: The Nasdaq-100 (NDX) fell 1.68%. The Roundhill Memory Chip ETF (DRAM) dumped 8.76%. 

With the U.S. and Iran at an impasse on peace negotiations, crude prices were up 0.41% to near $84 per barrel. Inflation from energy and other sources erodes the purchasing power of a bond's future cash flows, and yields have been rising as investors worry that oil prices could stay elevated. The U.S. 30-year Treasury bond yield hit a fresh 19-year high, above 5.3%, before pulling back. The benchmark 10-year yield hit highs above 4.7% last seen in January 2025. Rising yields, in turn, raise borrowing costs, a further source of market anxiety. 

For more on yields and what is pressuring chip stocks, see NVDA, MU & Other Chip Weakness Weighs on Wall Street, HD Earnings Rattle Housing. 

Highlights from Tuesday's market action: 

The biggest S&P 500 gainer was Targa Resources (TRGP), which rose 7% following news Monday that it established 20-year agreements with ExxonMobil (XOM) for integrated natural gas gathering and processing (“G&P”) and downstream services in the oil-and-gas-rich Permian Basin, which spans Texas and New Mexico, as well as “treating, NGL transportation, and fractionation.” Targa emphasized its "substantial long-term volume growth" for its infrastructure from "wellhead to water." The midstream energy services company, with a market cap exceeding $63 billion, bills itself as one of the largest independent infrastructure companies in North America. XOM shares rose 2.4% Tuesday. See $90 to $110 Oil to Hit Market? David McAlvany's Bull Case for Crude 

Housing starts, a gauge of new residential construction, fell sharply below expectations, by 12.4% in July to 1.239 million. Meanwhile, pending sales of previously owned homes fell 2.3% in July as high mortgage rates weighed on demand and record home prices pressured buyers, according to the National Association of Realtors. Home Depot (HD) reported earnings and revenue that exceeded analyst estimates and reaffirmed its full-year fiscal 2026 guidance. Shares of Home Depot fell fractionally Tuesday. Watch Home Depot’s (HD) Playbook for a Slowing Housing Market | The Watch List and read more on Housing in Focus with Lowe’s (LOW), Home Depot (HD) Earnings. 

Meta Platforms (META) fell 4.4% on Tuesday as arguments began in the California trial alleging Meta fostered addictive behavior in teens and children. A coalition of 29 state attorneys general brought the case in 2023. 

Bank of America reiterated a Buy rating on Nvidia (NVDA) ahead of its earnings report. BofA said the stock is undervalued and also reiterated a $350 price target. This comes one day after Nvidia said it would guarantee funds of up to $105 billion to help OpenAI lease a data center in Ohio being developed by SoftBank-owned SB Energy. See Wall Street Expects NVDA to Double Revenue & Other Earnings Metrics to Watch and Pence: NVDA 'Pivotal Chokepoint' of AI & Likes MSFT, AMZN, GOOGL in Mag 7 

Angrej Singh and Tom White contributed to this article 

For this week's economic and earnings calendars, see Week Ahead: Retail Earnings, FOMC Minutes, Housing Data in Focus 

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