Financial Markets                      09/15 15:26

   

   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.

   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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