NEW YORK, May 19, 2026, 16:02 (EDT)
- S&P 500, Nasdaq, and Dow slipped soon after the open, with Treasury yields moving higher.
- Higher yields and oil that won’t budge have weighed on the AI rally, while traders watched Nvidia’s earnings.
- Home Depot moved up after earnings. Akamai dropped after announcing a $2.6 billion convertible note offering.
U.S. stocks dropped on Tuesday, with the main indexes retreating further from recent records. Treasury yields rose, pressuring stocks as inflation worries picked up again.
S&P 500 closed 0.55% lower at 7,362.62, Nasdaq Composite lost 0.72% to 25,903.08 and the Dow fell 0.47% to 49,451.19, according to delayed Reuters data via LSEG right after the close. Brent crude held near $111 a barrel, a level that traders said could keep pressure on inflation.
S&P 500 and Nasdaq hit new records last week on AI strength, but bond yields and oil have since brought focus back to inflation and what the Fed does next. The market’s sharp run-up comes as traders weigh those risks.
10-year Treasury yields climbed to roughly 4.67% as investors stayed locked on yields moving up. “The focus for investors right now is on rising yields,” Peter Cardillo, chief market economist at Spartan Capital Securities, told Reuters. Reuters reported that yields pushed higher on worry the Iran war might trigger lasting inflation. Reuters
“One hundred percent of the story is yields,” said Ben Sullivan, chief investment officer at AE Wealth Management. Higher yields mean bonds can compete harder with stocks and push up discount rates, a common way investors price future profits in today’s terms. Reuters
30-year Treasury yield closed at 5.180%—the highest since July 2007, Barron’s reported. That puts more strain on areas like housing, corporate borrowing, and other parts of the economy tied to rates.
Tech is still calling the shots. Nvidia’s results coming Wednesday have traders watching the AI names. Options are pointing to a move of about 6.5% either way after Nvidia reports. According to Reuters, that could swing Nvidia’s market cap by around $355 billion.
“I think investors have become complacent about AI/capex,” said Matt Amberson, who runs ORATS. Chris Murphy, Susquehanna’s co-head of derivatives strategy, told Reuters chip stocks are now “a crowded leadership area,” which he said means strong results could still disappoint. Reuters
Akamai slipped after the cybersecurity and cloud firm said it plans to offer $2.6 billion in 0% convertible senior notes. These notes can turn into stock or cash under certain conditions. Akamai said the funds will go to speed up capital spending in its Cloud Infrastructure Services unit and for other corporate needs.
Home Depot held steady after posting first-quarter sales of $41.8 billion and keeping its fiscal 2026 forecast unchanged. CEO Ted Decker said demand matched last year’s, even with “greater consumer uncertainty and housing affordability pressure.” Home Depot Investor Relations
Home Depot’s results now tee up a look at consumer demand, as Lowe’s and Target report Wednesday and Walmart follows on Thursday. Reuters reported Home Depot kept its forecast for annual comparable sales at flat to up 2%. Telsey Advisory’s Joseph Feldman said the housing recovery “appears some time away.” Reuters
Bonds might not be done moving. If oil holds up and yields keep going, with Nvidia not easing AI spending concerns, more investors could move from profit-taking to defensive stances. Barclays strategists Rex Feng and Venu Krishna summed it up: “Every flow has its ebb.” apnews.com
