US stocks slip after oil prices and the bond market crank up the
pressure
[September 16, 2026]
By STAN CHOE
NEW YORK (AP) — U.S. stocks slipped Tuesday after oil prices and the
bond market cranked up the pressure on Wall Street.
The S&P 500 fell 0.4%. The Dow Jones Industrial Average dropped 328
points, or 0.6%, and the Nasdaq composite sank 0.8%.
They felt pressure as the yield on the 10-year Treasury, which is the
centerpiece of the U.S. bond market, climbed to 5.00% from 4.97% late
Monday and briefly touched 5.04% overnight. It’s been jumping to its
highest level in years, and Monday was the first time it breached 5%
since 2023.
Higher yields mean everyone from the U.S. government to households to
businesses must pay more in interest to borrow money, which slows the
overall economy. They also make people less willing to pay high prices
for stocks because they can earn more from sitting in bonds, which are
considered safer investments.
“The result is a market that must work harder to generate earnings
growth just as investors become less willing to pay premium valuations
for that growth,” according to Darrell Cronk, president of Wells Fargo
Investment Institute.
The last time the 10-year yield was consistently above 5% was around the
turn of the millennium, and it’s been a long march back since it
bottomed out below 0.50% in 2020. The pace has accelerated since
February, after the war with Iran sent oil prices much higher.
That raised worries about high inflation potentially lasting for years,
which are layering atop longstanding concerns about the U.S.
government’s massive debt level and other issues.
Oil prices rose further Tuesday following several sharp swings in the
morning. The price for a barrel of Brent crude, the international
standard, climbed 2.9% to settle at $108.75.
It remains well above its $72 level from early July and from before the
war with Iran began in February, as doubt continues about whether the
fighting will allow oil tankers to freely exit the Persian Gulf anytime
soon through the Strait of Hormuz.
Inflation remains high enough that the widespread expectation is that
the Federal Reserve will announce on Wednesday that it will hike the
federal funds rate for the first time in three years.
Traders are still betting on a slight chance that the Federal Reserve
could hold off on hiking interest rates, though. If it does, the market
could swing because investors may see it as a sign that the Fed is less
committed to getting inflation lower.
Fed officials will also release forecasts for where they see interest
rates heading in upcoming years, providing another opportunity to inject
uncertainty into the market.
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Michael Smyth works on the floor at the New York Stock Exchange in
New York, Monday, Sept. 14, 2026. (AP Photo/Seth Wenig)
 On Wall Street, stocks of companies
that depend on customers having enough spare cash to spend on their
products fell to some of the sharper losses.
Chipotle Mexican Grill dropped 5.9%. Darden Restaurants, the company
behind Olive Garden and Longhorn Steakhouse, sank 4.3%.
Dollar Tree, whose customers may have less financial cushion than
others, fell 5.4%.
Dave & Buster’s Entertainment tumbled 19% after reporting weaker
results for the latest quarter than analysts expected.
Elsewhere on Wall Street, stocks enmeshed in the cryptocurrency
industry sank after the U.S. Senate voted to block legislation
creating a new regulatory framework for crypto, while demanding more
limits on President Donald Trump’s investments.
Coinbase Global fell 10.1%, and Robinhood Markets lost 3.4%.
Several artificial-intelligence stocks meanwhile held steadier
following their worldwide slide the day before, after leaders of the
AI industry called for a slowdown in development to address safety
issues for humanity.
Nvidia added 0.6% a day after its 3.4% drop was the heaviest weight
on the S&P 500 index. Advanced Micro Devices climbed 2.2%.
Such stocks led the U.S. market to records for years, but they’ve
come under pressure recently on worries that their prices shot too
high in the frenzy around AI.
All told, the S&P 500 fell 34.25 points to 7,585.73. The Dow Jones
Industrial Average dropped 328.09 to 52,093.11, and the Nasdaq
composite fell 204.84 to 25,981.57.
In stock markets abroad, indexes fell across much of Europe and
Asia. But for several, the drops were not as sharp as Monday’s
caused by the slide for AI stocks.
South Korea’s Kospi index, for example, fell 0.9% following Monday’s
3.3% drop.
___
AP Business Writers Yuri Kageyama and Michelle Chapman contributed
to this report.
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