Wall St eyes lower open on extended chip selloff, inflation concerns

By Ragini Mathur and Utkarsh Hathi

U.S. indexes were on track to extend declines and open lower on Tuesday, weighed by a drop in chip stocks and persistent inflation worries despite retreating oil prices and a pause in Treasury losses.

Nvidia lost about 1% before the bell and was on track to drop for the third consecutive day as investors pulled back from richly valued semiconductor stocks that have helped drive U.S. equities to record highs this year.

Memory chip and data storage companies took a hit after surging in recent weeks. Micron Technology was down 2.4%, Seagate Technology fell 3.2%, while Western Digital dropped 3.6%.

Wall Street's rally was halted on Friday after a selloff in global bond markets evoked fears of major central banks tightening monetary policy as the Middle East conflict sends oil prices soaring, raising the specter of elevated inflation.

Brent crude futures dipped 1.4%, but were still above $110 after U.S. President Donald Trump said on social media on Monday that he had held off on a planned military strike against Iran, scheduled for Tuesday, while negotiations continued. [O/R]

Meanwhile, the benchmark 10-year Treasury yield eased slightly to 4.6213% after hitting its highest level since February 2025 on Monday. [US/]

"We are still in the same macroeconomic setup that is unideal for equities," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"The better-than-expected earnings and the earnings estimates have been digested so far and already priced in. The market is going back to pricing macroeconomic and geopolitical risks - and that is weighing on the technology stocks that have rallied so far."

At 08:27 a.m. ET, Dow E-minis fell 111 points, or 0.22%, S&P 500 E-minis were down 33.5 points, or 0.45%, and Nasdaq 100 E-minis lost 247.5 points, or 0.85%.

The tech-heavy Nasdaq led losses on Wall Street on Monday, as rising yields pressured technology and other growth stocks. Higher yields tend to weigh on such companies because their valuations rely heavily on potential future profits.

On Tuesday, cloud firm Akamai Technologies fell 3.7% after announcing a $2.6 billion convertible bond offering.

Meanwhile, shares of software firms kept the momentum from the last few sessions going and were the top gainers overall.

Workday rose 2.4%, Atlassian gained 3.5%, Intuit advanced 2.2%, and Zscaler and ServiceNow added 2.9% and 5.6%, respectively.

On Wednesday, investors will focus on minutes from the U.S. Federal Reserve's latest policy meeting for clues on how much support there was among policymakers to pivot to a neutral stance from an easing bias.

Markets are pricing in more than a 40% chance the central bank will raise interest rates by at least 25 basis points in January, according to CME's FedWatch tool.

Corporate earnings are another key test for markets. Nvidia, the world's most valuable company, is due to report results on Wednesday, with investors seeking evidence that AI-driven demand can justify elevated valuations across the semiconductor sector.

Walmart, the largest retailer globally, will also report earnings this week, and its results could offer a clearer view of how consumers in the United States are faring amid broad inflation pressures.

(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by Pooja Desai)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 19, 2026 at 6:01 AM.