By STAN CHOE AP Business Writer
NEW YORK (AP) — Wall Street pulled further from its all-time high on Tuesday as AI stocks got back to sinking.
The S&P 500 fell 0.7% for a third straight modest loss since setting its all-time high on Thursday. The Dow Jones Industrial Average dipped 116 points, or 0.2%, and the Nasdaq composite sank 1.3%.
Leading the way lower were stocks that have been big winners in the boom around artificial-intelligence technology. They’ve been veering up and down this summer on worries that their prices shot too high in the AI frenzy and that the strong demand for memory, processors and other building blocks of data centers may fizzle out if AI proves less profitable than promised.
Micron Technology dropped 7%, and the seller of computer memory was one of the heaviest weights on the S&P 500. So were chip companies Nvidia, which fell 2.3%, and Broadcom, which sank 3.2%.
Even with their recent swings, such stocks remain big winners, and Micron has more than tripled this year.
But stocks that critics call too expensive get more scrutiny when interest rates are high, and yields remained that way in bond markets worldwide Tuesday.
The yield on the 10-year U.S. Treasury edged down to 4.70% from 4.72% late Monday but remains well above its 3.97% level from just before the war with Iran began. The 30-year Treasury yield also ticked lower but is still near its highest level since 2007.
Yields have jumped since the war began because high oil prices are pushing upward on inflation. All the while, continuing worries about huge debt loads for governments and their increases in borrowing keep yields high.
When yields are high, investors are less willing to pay high prices for stocks and other kinds of investments, particularly those seen as the most expensive.
Much of the pressure on yields has come from oil prices, and Brent crude added 0.2% to $91.02 per barrel. It’s been swinging sharply on uncertainty about when and whether the United States and Iran can reach a deal to allow oil tankers to exit the Persian Gulf freely again. Brent was going for $72.87 per barrel just before the start of the war.
High yields have already sent the average long-term U.S. mortgage rate near its highest level in a year, which has hurt the housing industry. A report on Tuesday said homebuilders broke ground on fewer new houses last month than economists expected.
Such data helped to restrain Home Depot’s stock, which slipped 0.1% even though the retailer reported stronger profit and revenue for the latest quarter than analysts expected. Chief Financial Officer Richard McPhail said Home Depot saw its customers continue to pursue smaller projects.
High yields could also slow the borrowing Big Tech companies are doing to pay for data centers, putting at risk one of the big sources of growth for the U.S. economy.
Elsewhere on Wall Street, Klarna fell 22.8% even though the payments company reported stronger results for the latest quarter than analysts expected. The buy-now, pay-later company cut some of its financial forecasts for 2026, largely because of expectations for Germany, its largest market by volume.
Meta Platforms fell 4.4% as opening statements began in a pivotal trial in a California federal court, where states are seeking billions of dollars in damages for social media harms to children.
All told, the S&P 500 fell 53.30 points to 7,691.76. The Dow Jones Industrial Average dipped 116.38 to 53,343.40, and the Nasdaq composite sank 355.20 to 26,289.71.
In stock markets abroad, indexes were mixed in Europe and Asia.
South Korea’s Kospi fell 1.5%, which counts as relatively modest move for it. It had swung by at least 2.4% in each of its three prior days. Seoul’s market has been home to some of the world’s sharpest AI-induced swings because it’s dominated by two tech giants, Samsung Electronics and SK Hynix.
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AP Business Writer Yuri Kageyama contributed to this report.