By STAN CHOE, AP Business Writer<\/p>\n
NEW YORK (AP) \u2014 The U.S. stock market is slipping Tuesday as\u00a0oil prices<\/a>\u00a0and\u00a0the bond market<\/a>\u00a0crank up the pressure on Wall Street.<\/p>\n The S&P 500 fell 0.4%. The Dow Jones Industrial Average was down 506 points, or 1%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.<\/p>\n They felt pressure as the yield on the 10-year Treasury, which is the centerpiece of the U.S. bond market, climbed to 5.01% from 4.97% late Monday. It\u2019s been jumping to its highest level in years, and Monday was the first time it breached the 5% level since 2023.<\/p>\n Higher yields mean everyone from the U.S. government to households to businesses must pay more in interest to borrow money, which slows the overall economy. They also make people less willing to pay high prices for stocks because they can earn more from sitting in bonds, which are considered safer investments.<\/p>\n \u201cThe result is a market that must work harder to generate earnings growth just as investors become less willing to pay premium valuations for that growth,\u201d according to Darrell Cronk, president of Wells Fargo Investment Institute.<\/p>\n The last time the 10-year yield was consistently above 5% was around the turn of the millennium, and it\u2019s been a long march back since bottoming out below 0.50% in 2020. It\u2019s picked up speed since February, after the war with Iran sent oil prices much higher.<\/p>\n That raised worries about high inflation potentially lasting for years, which are layering on top of longstanding concerns about\u00a0the U.S. government\u2019s massive debt level<\/a>\u00a0and other issues.<\/p>\n Oil prices rose further Tuesday following several sharp swings in the morning. The price for a barrel of Brent crude, the international standard, climbed 1.7% to $107.49 after flipping between $105.10 and $108.43 earlier in the day.<\/p>\n It remains well above its $72 level from early July and from before\u00a0the war with Iran<\/a>\u00a0began in February, as doubt continues about whether the United States and Iran can reach an agreement that would allow oil tankers to freely exit the Persian Gulf through the Strait of Hormuz.<\/p>\n Inflation remains high enough<\/a>\u00a0that the widespread expectation is that the Federal Reserve will announce on Wednesday that it will hike the federal funds rate for the\u00a0first time in three years.<\/a><\/p>\n Traders are still betting on a slight chance that the Federal Reserve could hold off on hiking interest rates, though. If it does, the market could swing because investors may see it as a sign that the Fed is less committed to getting inflation lower.<\/p>\n Fed officials will also release forecasts for where they see interest rates heading in upcoming years, providing another opportunity to inject uncertainty into the market.<\/p>\n On Wall Street, stocks of companies that depend on customers having enough spare cash to spend on their products fell to some of the sharpest losses.<\/p>\n Chipotle Mexican Group dropped 4.8%. Darden Restaurants, the company behind Olive Garden and Longhorn Steakhouse, sank 3.6%.<\/p>\n Dollar Tree, whose customers may have less financial cushion than others to keep spending, lost 3.9%<\/p>\n Dave & Buster\u2019s Entertainment tumbled 15.3% after reporting weaker results for the latest quarter than analysts expected.<\/p>\n Elsewhere on Wall Street,\u00a0artificial-intelligence<\/a>\u00a0stocks held a bit steadier following their\u00a0worldwide slide the day before<\/a>, after leaders of the AI industry\u00a0called for a slowdown in development<\/a>\u00a0to address safety issues for humanity.<\/p>\n Nvidia rose 0.8%, a day after its 3.4% drop was the heaviest weight on the S&P 500 index. Advanced Micro Devices climbed 3%.<\/p>\n