US stocks drop as oil reaches $91 and yields rise Tuesday

US stocks fell Tuesday as the Nasdaq lost 1.2%, with higher oil prices and Treasury yields pressing on technology shares.

The S&P 500 dropped 0.6% and the Dow Jones Industrial Average declined 0.3%, extending weakness from the prior session. Market data later showed the S&P 500 at 7,711.61 as of 9:43 a.m. EDT, down 33.45 points, or 0.43%, from its previous close.

Oil reaches $91

Brent crude, the international benchmark, touched $91 a barrel, its highest level in more than two weeks. West Texas Intermediate, the US marker, rose to $84 a barrel, leaving traders to weigh a higher energy cost backdrop against equity valuations already pressured by rates.

The oil move followed remarks attributed to President Trump on Iran and the Strait of Hormuz, including a threat aimed at Oman if it interfered with US plans for the waterway. The Strait is a core transit route for crude shipments, so threats around access tend to draw fast attention from energy markets.

Market data cited for the session also placed the US Strategic Petroleum Reserve at its lowest level since 1982. That left the oil market with less visible emergency supply cushion at the same time benchmark prices were pushing higher.

Yields squeeze growth shares

The 10-year Treasury yield increased to 4.74%, while the 30-year yield advanced to 5.32%, the highest level in 19 years. When yields rise, bond prices fall, and higher benchmark rates can make long-duration equity cash flows less valuable in discounted models.

The pressure was clearest in technology, where the Nasdaq led the major indexes lower. Nvidia shares fell 2% at the open, a larger move than the S&P 500’s 0.6% decline and a sign that rate-sensitive growth names were carrying more of the session’s equity weakness.

The bond move coincided with higher oil, AI-related borrowing and concerns over government financing needs. Those forces matter for equities through the discount-rate channel: if debt markets demand higher returns, investors often reprice shares with richer valuations first.

Home Depot and Klarna slip

Home Depot shares dipped even after the company reported improved second-quarter sales. The retailer said customers leaned toward smaller summer projects, a mix that can support traffic while leaving larger discretionary renovation demand less clear.

Klarna also lost ground after trimming its outlook, though the source material did not provide the size of the share move or the revised forecast. The broader earnings season had helped support equities, but Tuesday’s tape showed macro pricing overpowering some company-specific results.

Scenarios hinge on yields

If oil remains near $91 for Brent and Treasury yields stay close to Tuesday’s levels, the macro effect would likely run through inflation expectations and borrowing costs. For Nvidia and other large technology companies, that setup would keep valuation multiples under pressure; for the wider sector, it would favor companies with nearer-term cash generation over longer-duration growth stories.

If oil eases and yields retreat from the 30-year’s 5.32% level, the pressure on rate-sensitive shares could lessen without requiring a major improvement in earnings. That path would lower the immediate macro stress from energy and financing costs, give Home Depot and Klarna more room for company-specific news to matter, and reduce the drag on consumer and technology shares.

The main uncertainty is whether the oil move is a short-lived response to political language or the start of a more durable repricing of supply risk. A second open question is whether government borrowing concerns and AI-related debt issuance keep global yields elevated even if crude prices stabilize.