U.S. stocks gave back part of their early gains on Wednesday as falling Treasury yields provided support, while continued weakness in technology and semiconductor shares limited the broader Wall Street rally.
The S&P 500 remained higher, while the Nasdaq slipped into negative territory as investors balanced easing bond-market pressure against renewed concerns surrounding AI-related technology spending.
S&P 500 and Dow Rise While Nasdaq Slips
At 09:57 ET, the benchmark S&P 500 gained 0.4% to 7,718.75, while the Dow Jones Industrial Average climbed 0.5% to 53,588.49.
The technology-heavy Nasdaq Composite fell 0.1% to 26,272.05, reflecting continued pressure on major technology and semiconductor stocks.
The mixed performance followed a difficult session on Tuesday. The S&P 500 declined 0.7%, the Dow fell 0.2% and the Nasdaq dropped 1.3%, marking its steepest decline since July 29.
Marvell Technology Jumps on Google Chip Deal
Marvell Technology surged after disclosing a commercial agreement with Alphabet’s Google to develop custom semiconductor products.
However, Marvell’s gains failed to lift the broader chip sector.
The Philadelphia Semiconductor Index moved lower as investors remained cautious following Tuesday’s sharp technology selloff.
Chip Stocks Remain Under Pressure
Semiconductor shares were among the biggest casualties of the previous session.
The Philadelphia Semiconductor Index plunged around 5% on Tuesday, while Nvidia fell 2.3% and Micron Technology dropped 7%.
Analysts at Vital Knowledge attributed the weakness partly to profit-taking following strong previous gains.
Investors are also becoming increasingly concerned about the enormous amount of debt being raised to finance the artificial intelligence infrastructure boom.
AI Spending Raises Questions for Technology Stocks
Technology companies continue to commit substantial amounts of capital to AI infrastructure, including advanced data centers and semiconductor systems.
However, investors are questioning whether the pace of spending and borrowing can remain sustainable over the long term.
These concerns have become increasingly important as AI-related valuations remain elevated and companies continue investing heavily in computing capacity.
Higher bond yields have added another challenge for technology stocks because they increase the discount rate applied to future earnings.
Growth companies can be particularly sensitive to rising yields because a larger portion of their expected value is based on profits projected further into the future.
Treasury Buybacks Push Long-Term Yields Lower
The U.S. bond market received significant support after the Treasury Department announced plans to expand buyback operations for longer-dated government debt.
The announcement helped push the 30-year Treasury yield sharply lower after it had reached its highest level in nearly two decades.
The move provided relief following Tuesday’s aggressive bond selloff.
The 30-year yield had climbed to its highest level since June 2007, while the benchmark 10-year Treasury yield ended Tuesday around 4.71%.
Bond Market Concerns Remain
Despite Wednesday’s decline in yields, the Treasury market remains a major focus for investors.
Concerns about inflation, government deficits and heavy U.S. borrowing requirements continue to influence demand for longer-dated bonds.
A sustained rise in Treasury yields could tighten financial conditions across the economy by increasing borrowing costs for consumers and businesses.
It could also place additional pressure on equity valuations, particularly in high-growth sectors.
Oil Above $91 Adds to Inflation Risks
Rising energy prices are another source of concern.
Brent crude remained above $91 per barrel on Wednesday as uncertainty surrounding the U.S.-Iran conflict and the Strait of Hormuz continued.
Higher oil prices could contribute to renewed inflationary pressure, potentially complicating the Federal Reserve’s monetary policy outlook.
U.S. President Donald Trump said on Tuesday that no negotiations with Iran were scheduled and that a U.S. naval blockade remained in place. Iranian officials also denied that talks were taking place.
Investors Await Federal Reserve Minutes
Wall Street is now focused on the Federal Reserve’s July meeting minutes for further clues about the direction of U.S. monetary policy.
Investors will closely examine the discussions after three regional Federal Reserve presidents dissented from the decision to leave interest rates unchanged.
Any indication that policymakers are becoming more concerned about inflation could influence Treasury yields, technology stocks and broader market sentiment.
Lowe’s Cuts Sales Outlook
Corporate earnings also remained in focus.
Lowe’s lowered its full-year sales guidance, with CEO Marvin Ellison pointing to weak consumer spending on large home renovation projects.
The announcement highlighted continued caution among consumers when making expensive discretionary purchases.
Target Raises Annual Sales Forecast
Target increased its annual sales target for the second consecutive quarter, providing another sign that its turnaround strategy may be gaining momentum under CEO Michael Fiddelke.
However, investors remained cautious about the stock after its substantial rally earlier in the year.
Analysts noted that expectations had become increasingly demanding following a gain of more than 50% in Target shares during 2026.
Wall Street Outlook Hinges on Yields and Technology Stocks
U.S. stocks remain caught between relief from lower Treasury yields and persistent weakness across the technology sector.
The Treasury’s expanded bond buyback program has helped ease pressure in fixed-income markets, but concerns surrounding AI spending, inflation and elevated oil prices remain.
Investors will now turn to the Federal Reserve minutes for signals that could determine the next move in interest rates, Treasury yields and major Wall Street indexes.
