Chip stocks led a Wall Street sell-off Tuesday as long-term borrowing costs across major economies hit multi-decade highs amid rising concerns over public debt and inflation triggered by the Iran war. The S&P 500 slipped 0.7 per cent and the Nasdaq 100 fell 1.7 per cent. Sandisk and Western Digital lost 9 per cent and 7 per cent respectively, while Nvidia fell 2.2 per cent. The Philadelphia Semiconductor index dropped 5.6 per cent.

The yield on 30-year US Treasuries rose to 5.34 per cent, its highest since 2007. German Bund yields hit 3.78 per cent (highest since 2011), French yields reached 4.9 per cent (since 2008), UK gilts touched 5.86 per cent, and Japanese 30-year yields neared record highs at 4.16 per cent. Brent crude traded above $90 a barrel, while US debt approaches $40tn.

"If [yields] keep climbing, they will keep a lid on the US equity bull market," said Mike Zigmont at Visdom Investment Group. Vincent Mortier of Amundi cited "growing concern on fiscal trajectories." Jonas Goltermann at Capital Economics noted "investors are losing patience with fiscal profligacy." Anshul Pradhan at Barclays highlighted budget deficits, $1.9tn expected AI-related corporate issuance in 2026, and shifting Treasury buyer bases as key drivers.