The Nasdaq Composite gave back early gains on Tuesday as lingering concerns over rising oil prices and the future of artificial intelligence weighed on market sentiment.
Investors grew cautious after crude oil benchmarks climbed to multi-month highs, stoking fears of persistent inflation. Higher energy costs threaten to slow economic growth and pressure corporate margins.
The tech-heavy index initially rose in morning trading but reversed course by the afternoon. Declines in major AI-related stocks contributed to the pullback.
SpaceX shares continued their slide, falling further below their IPO price. The drop added to broader unease in the technology sector.
Traders are now watching for comments from Federal Reserve officials later this week. Any signals on interest rate policy could shift market direction.
Analysts noted that volatility in oil markets remains a key risk for equities. Supply constraints and geopolitical tensions are driving price swings.
The AI sector faces increased scrutiny as investors reassess valuations. Some large-cap tech stocks have struggled to maintain recent gains.
Bond yields edged higher Tuesday, reflecting anxiety about sustained price pressures. The 10-year Treasury note yield rose to its highest level in weeks.
Market participants are weighing whether the current selloff presents a buying opportunity. Many are advising caution until oil price trends become clearer.
