Dow opens 150 points lower as oil rises and Treasury yields pressure stocks

US stocks opened lower on Tuesday as stalled negotiations between the US and Iran pushed oil prices higher and government bond yields remained elevated.

Rising Treasury yields also weighed on technology and semiconductor stocks, with investors assessing the potential impact of persistent inflation and higher borrowing costs.

The Dow Jones Industrial Average fell 153 points with gains in Home Depot helping limit the decline after the retailer reported better-than-expected second-quarter sales.

The S&P 500 was down 0.56% while the Nasdaq Composite dropped 1.24%.

Oil prices rise as US-Iran talks stall

Crude prices continued to climb as hopes for a lasting peace agreement between Washington and Tehran diminished.

US crude rose 0.93% on Tuesday to trade near $85 a barrel, while Brent futures gained 0.46% at around three-week highs.

The gains followed a rise in oil prices during the previous session, adding to concerns that elevated energy costs could keep inflation pressures persistent.

Iran could shift to a "fully offensive" military posture if negotiations with the US fail, according to a senior Iranian official cited by Reuters. Washington has also ruled out extending a temporary ceasefire agreement that expired on August 17.

The renewed uncertainty has increased concerns about energy supplies and contributed to the rise in Treasury yields.

Investors are also monitoring comments from President Donald Trump, who said Monday that the US would attack Oman if it interfered with its objectives.

The developments come as markets remain sensitive to the relationship between energy prices and inflation, particularly as traders continue to assess the Federal Reserve's next policy moves.

Treasury yields weigh on technology stocks

The yield on the 30-year Treasury bond rose more than one basis point to 5.323%, reaching levels not seen since 2007.

The 10-year Treasury yield also remained near its highest level since January 2025.

Higher yields can weigh on growth stocks by increasing borrowing costs and reducing the present value of future earnings. Technology stocks were therefore among the major areas of weakness in premarket trading.

Tesla and Nvidia each fell more than 1%, while semiconductor companies including Micron Technology, Marvell Technology, Advanced Micro Devices and Intel declined between 3% and 5%.

Storage companies SanDisk, Western Digital and Seagate Technology fell more than 5% each.

The CBOE Volatility Index rose to its highest level in roughly two weeks, signaling increased investor caution.

The pressure on technology stocks comes after strong earnings across several sectors, including AI-related companies, helped lift the S&P 500 and Dow to record highs earlier this month.

Nvidia's upcoming earnings report next week could provide another test for investor confidence in the AI trade.

Money-market data showed traders still saw a 96% probability of a 25-basis-point rate hike this year, although expectations for a September increase declined following softer inflation data last week.

Investors will look to the minutes from the Federal Reserve's July meeting, due Wednesday, for further clues on monetary policy.