US stocks fall further from their records after bond markets crank up
the pressure
[May 20, 2026] By
STAN CHOE
NEW YORK (AP) — The U.S. stock market gave back more of its
record-setting rally Tuesday after bond markets rattled by high
inflation cranked up the pressure.
The S&P 500 fell 0.7% for its third straight loss since setting its
latest all-time high. The Dow Jones Industrial Average dropped 322
points, or 0.6%, and the Nasdaq composite sank 0.8%.
The declines followed mixed moves for stock markets abroad, while oil
prices eased in their latest yo-yo move. Falling technology stocks in
Asia dragged South Korea’s Kospi down 3.3%, but Germany’s DAX returned
0.4%.
Tech stocks are faltering following huge runs made because of excitement
around artificial-intelligence technology, runs that critics said made
them too expensive. The stumble comes as oil prices swing on uncertainty
about how long the Iran war will keep the Strait of Hormuz closed for
oil tankers. That in turn has pushed yields higher in bond markets,
which is dragging on economies and pressuring all kinds of other
investments.
The wait is on, meanwhile, for Nvidia to report its latest quarterly
results. The chip company is due to report on Wednesday, and it’s
routinely blown past analysts’ expectations each quarter. Not only that,
it’s provided forecasts for future growth that have consistently topped
Wall Street’s.
How it does could determine whether technology stocks and the larger
U.S. stock market can maintain their rally. Nvidia fell 0.8% Tuesday and
was one of the heaviest weights on the S&P 500 because of its immense
size.
“Every flow has its ebb,” Rex Feng, Venu Krishna and other strategists
at Barclays Capital wrote in a report. They said investors have been
pumping more money than usual into U.S. stock funds, which helped fuel
“the fastest rebound in decades; now the pendulum could swing
backwards.”
Akamai Technologies dropped 6.3% for one of Wall Street’s sharper losses
after the cybersecurity and cloud computing company said it wants to
raise $2.6 billion through a convertible note offering.
Home Depot rose 0.9% after flipping an early loss following its latest
earnings report. Its profit and revenue edged past analysts’
expectations, but an important measure for retailers that looks at
performance for stores more than 1 year old came in below some analysts’
expectations.
CEO Ted Decker said Home Depot saw similar demand from its customers as
it did throughout last year “despite greater consumer uncertainty and
housing affordability pressure.”
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Specialist Michael Pistillo. Left, and trader Fred's Demarco work on
the floor of the New York Stock Exchange, Wednesday, May 13, 2026.
(AP Photo/Richard Drew)
 So far, many big U.S. companies have
been reporting stronger-than-expected profits for the latest quarter
thanks in part to their customers continuing to spend in the face of
high gasoline prices and other challenges. That’s helped vault U.S.
stock indexes to records, but disquiet in the bond market is
threatening that.
In the bond market, Treasury yields climbed further. The yield on
the 10-year Treasury rose to 4.66% from 4.61% late Monday and from
less than 4% before the war with Iran began. That’s a notable
increase, and it’s part of a worldwide climb that’s making stock
prices look even more expensive and threatening to slow the economy.
Higher yields can drive up rates for mortgages and loans going to
companies to build AI data centers, which has been a big source of
growth for the economy.
Yields rose even as oil prices eased. The price for a barrel of
Brent crude slipped 0.7% to settle at $111.28, though it’s still
well above its $70 level from before the war with Iran.
The average price for a gallon of gasoline rose again overnight to
$4.53, according to the AAA motor club, or about 43% more than it
cost last year at this time.
All told, the S&P 500 fell 49.44 points to 7,353.61. The Dow Jones
Industrial Average dropped 322.24 to 49,363.88, and the Nasdaq
composite sank 220.02 to 25,870.71.
In stock markets abroad, London’s FTSE 100 edged up 0.1% despite a
2.2% drop for Standard Chartered. The bank said Tuesday it plans to
reduce over 7,800 roles as it steps up artificial intelligence and
automation uses. It’s the latest big company to cite AI as one of
the reasons for cutting jobs.
___
AP Business Writers Yuri Kageyama, Matt Ott and Chan Ho-him
contributed to this report.
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