Democrats hammered Treasury Secretary Bessent over rising borrowing costs at a House hearing

Wall Street experienced a decline on Tuesday, primarily due to rising oil prices, higher Treasury yields, and uncertainty surrounding AI demand. The indexes including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all dropped by 0.89%, 0.49%, and 0.75% respectively. Chipmakers, led by Nvidia, showed a slight gain after a Monday sell-off.

However, other Big Tech stocks like Alphabet, Amazon, and Microsoft fell by more than 1% each. The decline was fueled by calls from top AI companies urging a slowdown in development due to safety concerns. Despite the gloom, the Federal Reserve is expected to raise interest rates, with traders pricing a nearly 93% chance of a hike on Wednesday.

Oil prices continued to be a significant factor, with Brent crude futures increasing by 2.6% to $108.41 per barrel and U.S. West Texas Intermediate futures rising 3.3% to $104.76 per barrel. Energy stocks, which typically benefit from higher oil prices, were the only major sector index to gain on the S&P 500, increasing by 1.9%.

The S&P 500 consumer discretionary index led the decline with a 1.4% drop. Meanwhile, the yield on the benchmark U.S. 10-year Treasury note reached its highest level since 2007, at 4.9957%. The market sentiment was largely negative, with declining issues outnumbering advancers by a ratio of 2.56-to-1 on the NYSE and 2.57-to-1 on the Nasdaq.

The S&P 500 recorded seven new 52-week highs and 13 new lows, while the Nasdaq Composite had 29 new highs and 208 new lows.