Dow drops 115 points as S&P 500’s six-day rally ends

Wall Street’s momentum stalled Tuesday as investors pulled back from tech stocks and rising bond yields renewed pressure on equities.

The Dow Jones Industrial Average fell 114.83 points, or 0.27%, while the S&P 500 dipped 0.39%, ending a six-day winning streak. 

The Nasdaq Composite slid 0.38% as chipmakers and megacaps retreated, led by losses in Nvidia, AMD, Meta, Apple, and Microsoft. The tech sector was the S&P 500’s worst performer, falling roughly 0.9%.

The pullback follows a five-week rebound that lifted the S&P 500 more than 20% off its April low, driven by optimism around tariff de-escalation following President Trump’s earlier tariff announcement. The index is now about 3% below its all-time high.

“We’ve had the swoon related to tariffs, the furious rally, and now we’re awaiting clarification,” said Bill Northey of U.S. Bank Wealth Management. “It’s optimism without clarity.”

Meanwhile, bond markets added to the unease. The 10-year Treasury yield climbed to 4.48%, while the 30-year briefly topped 5% for the second straight day—its highest since November 2023. 

The rise follows Moody’s decision to downgrade U.S. debt, citing ballooning deficits and rising interest expenses.

Equity valuation challenges

Analysts say yields at or above 4.5% tend to challenge equity valuations. “If the 30-year is breaking out, does that mean the rest of the curve is next?” said Manulife’s Matthew Miskin. 

Morgan Stanley’s Michael Wilson noted that equities have consistently faced valuation pressure when the 10-year yield breaches 4.5%.

Elsewhere, Tesla shares rose 2% after Elon Musk reaffirmed his commitment to remain CEO for at least five more years. On the political front, President Trump failed to win over GOP holdouts on a key tax bill, jeopardizing its passage before Memorial Day.