Wall Street opened Tuesday in negative territory, with the S&P 500 falling 0.20%, the Dow Jones losing 0.52% and the Nasdaq Composite down 0.26%. The decline was driven by rising oil prices and increasing Treasury yields, with the 10-year US debt interest rate reaching levels not seen in about 19 years.
Investors are cautious ahead of upcoming communications from the Federal Reserve, seeking signals about the monetary authority's response to a potential resurgence of inflation. The possibility of a more restrictive monetary policy has weighed on risk assets. The worsening of tensions in the Middle East increases the risk of new disruptions in the oil market and greater pressure on prices, reigniting inflation concerns.
In the technology sector, Nvidia rose 0.94%, with CEO Jensen Huang participating in a panel during which he received a live call from President Donald Trump, who rejected concerns about AI risks, classifying them as a "hoax". Cryptocurrency-linked companies are among the most pressured, with bitcoin falling more than 3% from the high near $79,500 reached on Monday, while Coinbase, Robinhood and Strategy fell more than 4%.
The US Senate is expected to vote Tuesday afternoon on the cryptocurrency regulation bill, known as the Clarity Act, at a time when expectations for approval this year have diminished. Investors should remain cautious while assessing the impact that a potential persistence of inflationary pressures may have on monetary policy and stock valuations.
