U.S. stocks close lower amid rising yields

NEW YORK, May 19 (Xinhua) -- U.S. stocks ended lower on Tuesday as climbing U.S. Treasury yields continued to weigh on investor sentiment.

The Dow Jones Industrial Average dropped 322.24 points, or 0.65 percent, to 49,363.88. The S&P 500 sank 49.44 points, or 0.67 percent, to 7,353.61, and the tech-heavy Nasdaq Composite Index shed 220.03 points, or 0.84 percent, to close at 25,870.71.

A primary source of downward pressure came from the fixed-income market. The yield on the benchmark 10-year U.S. Treasury note climbed back above 4.6 percent, while the 30-year Treasury yield nearly touched 5.2 percent, marking its highest level in nearly 19 years.

The high-yield environment acted as a drag on high-valuation growth sectors, which are particularly sensitive to elevated interest rates. Six of the 11 primary S&P 500 sectors closed in negative territory, with materials and communication services leading the declines by dropping 2.27 percent and 1.58 percent, respectively. In contrast, the healthcare sector gained 1.09 percent and the energy sector advanced 1.03 percent.

Despite the broader equity retreat, a Bank of America Securities global fund manager survey revealed a significant positioning shift, showing that institutional cash allocations fell from 4.3 percent to 3.9 percent. "Bull capitulation almost complete," Michael Hartnett, investment strategist at Bank of America Securities, wrote on Tuesday. "Early June ripe for profit-taking, bond yields to determine degree of pullback."

On the earnings front, Home Depot edged up 0.88 percent after the home-improvement retailer reported quarterly earnings that exceeded analyst consensus estimates. Sporting goods company Amer Sports advanced 2.05 percent following its positive financial update.

Market participants are focusing on Wednesday's upcoming after-hours earnings release from Nvidia. "Large speculators in NDX futures [are] flipping to their largest net short position since the 2023 low ahead of NVDA's earnings," Rob Ginsberg at Wolfe wrote on Monday. Enditem