Technology sector weighs on US stocks as Iran talks remain deadlocked

Wall Street's major indexes fell to their lowest levels in nearly two weeks on Tuesday, pressured by losses in megacap technology stocks, while fading hopes for a peace agreement between the United States and Iran kept oil prices elevated and government bond yields near multi-year highs.

At 9:35 a.m. ET, the Dow Jones Industrial Average fell 132.55 points, or 0.25%, to 53,327.23.

The S&P 500 dropped 35.37 points, or 0.46%, to 7,709.69, while the Nasdaq Composite declined 275.95 points, or 1.04%, to 26,368.96.

Megacap technology stocks fall

Most megacap and growth stocks declined, as higher government bond yields can reduce the present value of technology companies' future earnings while also increasing corporate borrowing costs.

Nvidia shares fell 2%, while Meta Platforms dropped 3%. The S&P 500 information technology sector was the biggest drag on the broader index, falling 1.5%.

Chipmakers also came under heavy selling pressure, with the Philadelphia Semiconductor Index sliding 3.7% to its lowest level in a week.

US technology stocks have experienced significant volatility in recent months as investors remain concerned about whether massive investments in artificial intelligence are generating sufficient returns.

Geopolitical deadlock

Iran said it would shift to a "fully offensive military posture" as efforts to negotiate a permanent end to the war with the United States stalled, while Washington ruled out extending the temporary ceasefire agreement that expired on August 17.

The yield on the 30-year US Treasury climbed to its highest level since 2007, while the benchmark 10-year yield remained near its highest level since January 2025.

Markets were pricing in a 96% probability of a 25-basis-point interest rate hike this year, while expectations for a September increase declined following last week's softer inflation data.

The minutes of the Federal Reserve's July meeting, due on Wednesday, could provide further clues on how the central bank is assessing current economic conditions.