U.S. stocks fell into Tuesday’s close as investors cut exposure to risk assets, with Iran-war uncertainty keeping oil elevated, rising Treasury yields, and renewed pressure on technology shares weighing on the broader market. The Dow Jones Industrial Average ended at 49,363.9, the S&P 500 finished at 7,353.61 and the Nasdaq Composite closed at 25,870.7.

The Dow declined 322.24 points, or 0.65%, while the S&P 500 lost 49.44 points, or 0.67%. The Nasdaq fell the most among the major indexes, dropping 220.03 points, or 0.84%, as investors reassessed the durability of the AI trade after a powerful run.

The 30-year Treasury yield climbed to its highest level in nearly two decades, reinforcing investor concern that long-term borrowing costs are again becoming a headwind for equities. The move added pressure to rate-sensitive stocks and growth shares, as higher yields reduce the appeal of future earnings and raise financing costs across the economy.

Another driver was a more cautious geopolitical backdrop. President Donald Trump threatened Iran with a “big hit” if there is no deal soon, raising the risk that the conflict could again escalate. The Wall Street Journal reported that mediators saw little progress in U.S.-Iran talks, with Tehran and Washington still far apart on core demands.

WATCH:

📺 S&P 600 Small Caps Lead as Rally Spreads Beyond Big Tech

📺 The Nvidia Blindspot: Where the Next 80% of AI Profits Are Hiding

📺 Trump-Xi Summit Gives Investors New China Playbook as AI, Taiwan Risks Loom

Energy prices reflected that tension. Crude oil settled near $104.55, up 17 cents, or 0.16%, holding at levels that keep pressure on inflation expectations and consumer spending. Gold moved the other way, falling $67.50, or 1.48%, to $4,490.50, suggesting investors were not simply rushing into havens but were also taking profits after a sharp run in defensive assets.

Google unveiled what it described as the biggest update to Search in 25 years, including expanded AI capabilities and agentic tools. Google used its I/O conference to showcase new AI products across Search, Gemini and enterprise software, intensifying investor focus on whether AI can protect Google’s search franchise or pressure margins through heavier infrastructure spending.

Consumer stocks also remained in focus ahead of Target’s earnings. AInvest, citing analyst forecasts, said Target was expected to report quarterly earnings of $1.35 a share on revenue of $24.28 billion, while investors would be watching sales trends, store traffic and digital comparable sales.

The VIX edged up to 17.93, a modest gain of 0.62%, showing that investors were cautious but not panicked. The day’s trading suggested portfolio managers were trimming exposure rather than abandoning equities outright, with the next move likely to depend on Iran headlines, oil prices and whether upcoming earnings reports from Nvidia and Intuit can support the market’s AI and consumer-growth assumptions.