The Nasdaq Composite and the S&P 500 fell for a third consecutive session on Tuesday and Treasury yields jumped, while traders assessed US President Donald Trump's latest remarks on the conflict with Iran.
The Nasdaq declined 0.8% to close at 25,870.7, while the S&P 500 lost 0.7% to 7,353.7. The Dow Jones Industrial Average dropped 0.7% to 49,363.9. Six of the 11 sectors ended in the red, led by materials' 2.3% decline, while healthcare paced the gainers.
"Investors are still navigating a market shaped by geopolitics, oil prices, and rising bond yields," Saxo Bank said in a report.
US Treasury yields were higher in Tuesday late-afternoon trade, with the 10-year rate up 4.2 basis points at 4.67% and the two-year rate rising 2.6 basis points to 4.12%.
Global bond yields have climbed, which could be attributed to the rise in long-term inflation expectations, particularly in the US, Macquarie said in a report.
"That's making nominal coupon-paying assets less attractive, and putting upward pressure on long-term yields," Thierry Wizman, global foreign exchange and rates strategist at Macquarie, said. "Aggravating this move in the US is that the (Federal Reserve) has been late to signal that it has moved toward a neutral policy bias, let alone a tightening bias."
West Texas Intermediate crude was last down 0.8% at $107.77 per barrel, while Brent fell 0.9% to $111.09.
Trump told reporters Tuesday that the US may need to strike Iran again, Reuters reported.
That followed his statement on Monday that the US had postponed a planned military strike on Iran amid ongoing negotiations.
The delay would last for "a limited period of time," CNN reported, citing Trump.
"Oil prices are gyrating between yesterday's increase after tough talk from Trump over the weekend and today's slight pullback after Trump said he held off on launching additional attacks on Iran following appeals from Gulf states," Scotiabank said in a note earlier in the day.
Washington and Tehran have had a series of talks, but are yet to finalize a framework on a peace deal.
"The net effect is that oil prices have been higher since Friday and this reflects the general perception that there is no traction in negotiations," Scotiabank said. "Nor should any progress be expected in what is likely to be a stalemate."
In company news, Home Depot (HD) reported fiscal first-quarter results above market expectations despite consumer uncertainty, while the home improvement retailer reiterated its full-year outlook. The company's shares rose 0.9%.
Nvidia (NVDA) shares ended a choppy session 0.8% lower. The chipmaking giant is scheduled to report results after the closing bell Wednesday.
Nvidia's fiscal first-quarter sales are expected to outperform market projections, with potential for "enhanced" cash returns likely to be among the key areas of focus, BofA Securities said in a note e-mailed Tuesday.
Gold was down 1.2% at $4,504.40 per troy ounce, while silver lost 3.6% to $74.65 per ounce.
