S&P 500 Pulls Back From Record High as Elevated Yields Weigh on Sentiment

U.S. stocks declined Wednesday as rising Treasury yields weighed on investor sentiment, with bond yields reaching their highest levels in more than two decades.

The Dow Jones Industrial Average fell 341.41 points, or 0.66%, to close at 51,179.87. The S&P 500 slipped 0.22% to 7,801.77, while the Nasdaq Composite also declined 0.22% to finish at 27,538.69.

The benchmark 10-year Treasury yield climbed to 5.365%, its highest level since April 2002, while the 30-year yield reached 5.732%, the highest since May 2002. Yields eased from their session highs following a $39 billion Treasury auction, helping stocks recover some of their earlier losses.

Investor sentiment was also pressured by the Federal Reserve's September meeting minutes, which indicated that most officials believed another interest-rate increase would likely be appropriate before the end of the year. However, policymakers stressed that future decisions would depend on incoming economic data and evolving risks.

Higher borrowing costs weighed on financial and technology stocks. Goldman Sachs and Bank of America each declined around 1%, while Wells Fargo, Citigroup and JPMorgan also finished lower.

Technology shares faced additional pressure as investors worried that elevated interest rates could raise financing costs and slow spending on artificial intelligence infrastructure. CrowdStrike dropped nearly 5%, while Palo Alto Networks and Meta Platforms fell more than 3% and 2%, respectively.

Oil prices also moved lower. U.S. crude settled 1.3% down at $88.28 a barrel, while Brent crude declined 0.4% to $100.20.

The pullback came a day after the S&P 500 closed above 7,800 for the first time, supported by strong gains in semiconductor stocks.