U.S. stocks slide under pressure from higher rates

Stocks fell Tuesday as a jump in bond yields threatened the bull market by weighing on the U.S. consumer and undermining the growth of technology stocks.

Traders also kept an eye on the oil market following President Donald Trump’s cancellation of planned attacks on Iran, as well as recent stress on chip stocks.

The S&P 500 slid 0.7%, while the Nasdaq Composite pulled back 1.1%. Both benchmarks were headed for their third losing session in a row. The Dow Jones Industrial Average shed 245 points, or 0.5%.

The bond market has added a new wrinkle to the bull market. The 30-year Treasury yield hit 5.198%, or its highest level in nearly 19 years on Tuesday. The move in rates comes after a series of reports last week showing inflation was revving back up as the war in Iran lifted oil prices. Higher rates on things like credit cards and mortgages rates could curb consumer spending. Meanwhile, the rate increase could temper long-term economic growth and expose the sky-high valuations seen recently in some chip stocks.

“The bond vigilantes are at play right now,” said Will McGough, Chief Investment Officer at Prime Capital Financial. “Everybody’s on to energy prices staying higher, which could lead into inflation that’s behind the curve a little bit.”