U.S. stocks finished modestly lower Tuesday, with the S&P 500 down 0.17%, as the 10-year Treasury yield climbed to 5.278%, near its highest level since 2007. The Philadelphia Semiconductor Index rose 1.3%, while traders priced in 49% odds of an October Fed rate hike, down from nearly 70% earlier in the day.
The Dow fell 0.26%, the S&P 500 dipped 0.17% and the Nasdaq edged down 0.09% on Tuesday. Energy was the weakest S&P 500 sector, while utilities led gainers.
The 10-year Treasury yield rose to 5.278%, near its highest level since 2007, and the 30-year yield reached its highest mark since 2002. The move came despite falling oil prices, as investors remained concerned that energy-driven inflation could prompt the Federal Reserve to raise rates more aggressively than previously expected.
Two-year Treasury yields fell as traders pared back bets on an October Fed hike. New York Fed President John Williams said the central bank has time to weigh incoming data before deciding on its next move. Chipmakers helped offset broader declines, with the Philadelphia Semiconductor Index up 1.3%.
