By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel consensus is bearish, with rising 10-year yields above 4.6% and potential Nvidia earnings disappointment driving a re-rating of growth stocks, particularly AI leaders.
Risk: Nvidia's earnings guidance falling short of expectations, which could accelerate a broader rotation out of tech stocks.
Opportunity: Nvidia delivering strong earnings, which could temporarily unlock a re-rating of growth stocks despite elevated yields.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Tech stocks led US markets lower before the bell on Tuesday, resuming a pullback as investors weighed apparent signs of progress toward an end to the US-Iran war.
Contracts on the tech-heavy Nasdaq 100 (NQ=F) sank roughly 0.8%, while those on the S&P 500 (ES=F) dropped 0.4% on the heels of back-to-back losses. Dow Jones Industrial Average futures (YM=F) fell 0.2%.
Rising Treasury yields continued to put pressure on stocks, as the benchmark 10-year rate (^TNX) climbed above 4.6% again early Tuesday. Worries about higher inflation have lifted bond yields, as blockades in the Strait of Hormuz spurred a rally in oil prices.
Wall Street is debating whether the Federal Reserve will hike interest rates to get inflation under control. That’s seen as putting the appetite for growth stocks at risk, with high-flying AI stock valuations particularly in focus.
Optimism about a resolution crept into markets after President Trump said on Monday that “serious negotiations” are taking place, and there is a “very good chance” of a deal on Iran’s nuclear program. He said that at the request of Gulf allies, he had halted military action against Iran that was scheduled to take place on Tuesday.
The release of Nvidia (NVDA) earnings on Wednesday is the focal point of the week. Investors’ expectations for the world’s most valuable company are sky high. Moreover, Nvidia is a bellwether for the AI trade, which has become increasingly important in propping up markets amid inflation and geopolitical uncertainty.
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Deutsche Bank: 3 factors that could cause a summer stock market correction
Yahoo Finance’s Brian Sozzi reports:
Several things have to happen to set the stage for a summer stock market correction, Deutsche Bank strategist Henry Allen warned. To get a more pronounced sell-off in stocks, Allen said, past experience has shown it would require at least one of the following factors:
“So far, it’s tough to argue we have any of these,” Allen noted. “The closest is the point on the ‘sustained’ oil shock, as markets are increasingly pricing in a longer period of elevated oil prices. But even there, the six-month Brent future is still only just above $90 a barrel, and declining energy intensity means that a given level for oil prices doesn’t create the economic shock it used to. So unless we see a clear change in these fundamentals, then the resiliency of risk assets is not particularly remarkable, but is in keeping with the historical record of recent decades.”
CoreWeave stock drops after Blackstone, Google announce AI computing joint venture
Cloud computing companies CoreWeave (CRWV) and Nebius (NBIS) are about to have stiffer competition.
The two stocks fell around 3% after Blackstone (BX) and Google (GOOG) announced on Monday night that they’re launching a new artificial intelligence computing firm that will provide data center capacity, operations, networking, and Google Cloud's Tensor Processing Units (TPUs) as a compute-as-a-service offering.
Yahoo Finance’s David Hollerith reports that the business will give customers another way to access Google’s TPUs, in a similar fashion to cloud provider CoreWeave. Blackstone said it will make an initial $5 billion equity investment through its funds, and it expects the company’s first 500 megawatts of power to come online by 2027.
Home Depot reaffirms outlook as small DIY projects provide sales boost
Home Depot (HD) reaffirmed its 2026 outlook as homeowners continued to invest in smaller, do-it-yourself type projects, despite a tough housing market backdrop, concerns about higher gas prices, and economic uncertainty.
“There's no question that the average consumer is feeling pressure from rising fuel costs,” CFO Richard McPhail told Yahoo Finance. “Our customer tends to have higher incomes and higher housing wealth, but they do tell us that they're feeling the impact of fuel costs.”
In the quarter, the company posted same-store sales growth of 0.6%, which slightly missed the Street’s outlook of 0.9%, per Bloomberg consensus data.
Revenue beat expectations, growing roughly 5% year over year to $41.8 billion, higher than the $41.6 billion the team posted this time last year. Adjusted earnings came in at $3.43, topping expectations of $3.41.
SpaceX IPO adds second Musk stock. It’s a problem for Tesla.
From Bloomberg:
For years, there was only one way for mom-and-pop investors to buy into Elon Musk’s vision: shares of Tesla (TSLA) Inc. That’s about to change — and it’s a serious risk for Tesla investors.
With the imminent initial public offering of Space Exploration Technologies Corp., better known as SpaceX (SPAX.PVT), the market will have an additional entry point for the “Muskonomy.”
Wall Street pros see investors’ attention and capital inevitably being siphoned away from Musk’s electric-vehicle maker and to his shiny new toy.
“This cannot be a positive for Tesla,” said Joe Gilbert, portfolio manager at Integrity Asset Management. “We believe that Musk’s focus will predominantly be lasered on SpaceX. Musk has proved to be able to balance multiple initiatives simultaneously in the past, but it feels like SpaceX is his new baby at the expense of Tesla.”
Indeed, the seemingly inherent competition between Tesla and SpaceX is a key reason why Musk is reportedly considering merging the two companies.
Asian markets drop as global bond rout intensifies economic stress
Reuters reports:
Asian shares were mixed Tuesday as uncertainty about what will happen with the Iran war roiled global markets.
Japan's benchmark Nikkei 225 (^N225) lost 0.6% in morning trading to 60,433.79, erasing initial gains after the government reported that the economy grew for the second straight quarter in January-March, mainly due to better than expected consumer spending.
South Korea’s Kospi (^KS11) sank more than 4% in early trading and was down 3.5% at 7,249.73 by midday. Shares in Samsung Electronics slipped 3.8% and SK Hynix fell 4%, tracking losses in tech shares overnight on Wall Street.
Australia's S&P/ASX 200 added 0.9% to 8,582.80. Hong Kong's Hang Seng (^HSI) climbed 0.5% to 25,811.28, while the Shanghai Composite shed 0.3% to 4,121.11.
Oil falls following Trump comments on planned Iran strikes
Bloomberg reports:
Oil fell after President Donald Trump said he’d called off a strike on Iran planned for Tuesday following an appeal by Persian Gulf allies.
West Texas Intermediate (CL=F) for July dropped below $103 a barrel, after rising 3.3% on Monday, while Brent (BZ=F) closed above $112. Trump said in a social media post that the leaders of Saudi Arabia, Qatar and the United Arab Emirates asked “to hold off on our planned Military attack of the Islamic Republic of Iran, which was scheduled for tomorrow, in that serious negotiations are now taking place.”
Oil has rallied on uncertainty about the talks, and the possibility that the near-total closure of the Strait of Hormuz will choke off Persian Gulf energy supplies for longer. Trump has repeatedly threatened renewed military action against Iran without following through, and Tehran didn’t immediately confirm renewed discussions.
“The president’s calling off tomorrow’s ‘scheduled’ attack is a positive,” said Mark Malek, chief investment officer at Muriel Siebert & Co. “The change of plans just shows how stochastic the situation is with negotiations.”
Trump said the US is prepared to attack if an acceptable deal isn’t reached but didn’t set a deadline.
Four leading AI models discuss this article
"Yields climbing above 4.6% pose a direct threat to AI stock multiples that earnings beats alone may not offset."
Rising 10-year yields above 4.6% combined with oil volatility from Iran tensions are compressing multiples on growth names ahead of Nvidia's Wednesday earnings. The article underplays how a sustained yield spike would force re-rating of AI leaders trading at 30-40x forward earnings even if Q2 beats materialize. Deutsche Bank's correction triggers remain only partially met, yet the market's reliance on one bellwether like NVDA leaves little margin for disappointment. Asian tech weakness and CoreWeave's drop already hint at capital rotating away from pure AI plays.
A quick Iran deal could drop oil below $90 and ease inflation fears enough for the Fed to stay on hold, supporting the same high-valuation tech names the article flags as vulnerable.
"The real story is decoupling: yields rising on inflation, not geopolitics, which means growth-stock repricing is structural, not cyclical—and Nvidia's margin profile on Wednesday will determine whether that repricing stops or accelerates."
The article conflates three separate pressures—rising yields, geopolitical noise, and tech valuation anxiety—but misses the real tension: oil fell after Trump's de-escalation comments, yet the 10-year yield *climbed* to 4.6%, suggesting bond markets are pricing inflation expectations independent of near-term Iran risk. That's the tell. If yields are rising on structural inflation concerns rather than oil shock fears, then the pullback in growth stocks (NQ down 0.8%) is rational repricing, not panic. Home Depot's 0.6% comp miss despite revenue beat signals consumer resilience is fragmenting—higher-income cohorts spending on DIY while mass market tightens. Nvidia earnings Wednesday will reveal whether AI capex demand justifies current multiples or if the market has front-run reality.
Trump's Iran 'de-escalation' has zero credibility after repeated false alarms; markets may be pricing in renewed conflict by week's end, making today's oil dip a sucker's rally. Meanwhile, the Blackstone-Google TPU venture directly threatens CoreWeave's moat, signaling that AI infrastructure competition is intensifying faster than consensus expects.
"Rising bond yields are a more permanent threat to tech valuations than the transient geopolitical noise surrounding the Strait of Hormuz."
The market is currently trapped in a 'geopolitical volatility tax.' While the headline focus is on the potential Iran de-escalation, the real structural issue is the 10-year Treasury yield breaching 4.6%. This yield level is the threshold where equity risk premiums become unattractive, particularly for growth-heavy indices like the Nasdaq 100. The Blackstone-Google joint venture is a structural bearish signal for pure-play cloud providers like CoreWeave; it signals that hyperscalers are moving to internalize AI compute, compressing margins for third-party providers. Investors are pinning too much hope on Nvidia's earnings to act as a floor, but if yields remain elevated, even a beat may not prevent a valuation re-rating.
If the Iran situation stabilizes, the resulting drop in oil prices could act as a massive deflationary tailwind, potentially allowing the Fed to pause and sparking a massive relief rally in tech.
"Nvidia earnings can catalyze a relief rally for tech despite higher yields, given durable AI/cloud demand and potential policy easing later in the year."
Despite yields above 4.6% and talk of higher rates, the market risk seems more idiosyncratic than structural. Nvidia earnings due Wed are the real catalyst; if NVDA guides or exceeds, AI-demand-driven earnings could re-rate growth stocks even with higher discount rates. The Iran news is a headline risk that could fade; a resolution would ease oil and geopolitical risk, not worsen it. The piece omits the possibility that a cooling inflation trajectory could allow the Fed to pause later this year, a scenario that would lift risk assets. Also, buybacks and cloud capex remain resilient tailwinds for tech.
The strongest counter: Nvidia could guide cautiously or miss, and yields staying stubbornly high could derail any AI-led rerate; geopolitical risk re-ignition or a stronger-than-expected inflation print would kill the upside.
"High yields plus any Nvidia shortfall could widen the selloff past pure AI plays into the broader Nasdaq."
Claude highlights the bond market's independent inflation pricing, yet this ignores how persistent high yields could interact with Nvidia's earnings to trigger a broader rotation out of tech. If NVDA's guidance disappoints even slightly, the combination with 4.6% yields may accelerate the CoreWeave-style pullback Gemini mentioned, affecting not just pure AI plays but also broader Nasdaq components reliant on capex momentum.
"The 4.6% yield level is only bearish if real yields have actually risen; if nominal yields climbed while inflation expectations fell, growth stocks may not face the multiple compression everyone assumes."
Claude and Gemini both assume yields are pricing structural inflation, but neither tests whether 4.6% is actually *high* in real terms. If inflation expectations have compressed since May, real yields may be normal, not punitive. That reframes the entire repricing narrative. Also, ChatGPT's buyback tailwind is real but cyclical—if earnings guidance weakens, buyback discipline tightens. Nvidia Wednesday becomes binary: beats unlock re-rating despite yields, or misses confirm the rotation is structural, not temporary.
"Persistent Treasury supply will force institutional capital out of tech into bonds, regardless of real yield levels or Nvidia's earnings."
Claude, your focus on real yields is the missing link, but you ignore the liquidity trap. Even if real yields are 'normal,' the sheer volume of Treasury issuance required to fund the deficit creates a supply-demand imbalance that keeps nominal yields sticky. This forces institutional rebalancing out of tech into fixed income regardless of inflation data. Nvidia's earnings won't just be a binary event; they will dictate whether the market has enough liquidity to absorb this bond supply.
"Even with normalization of real yields, nominal duration risk and AI infra competition imply ongoing multiple compression for growth names; Nvidia alone won't re-rate the sector."
Claude's real-yields framing misses the macro drag of ongoing Treasury issuance. Even with 'normal' real yields, the higher nominal yield regime and persistent duration risk keep growth multiples under pressure—Nvidia alone can't lift the complex of AI-capex. The JV between Blackstone and Google amplifies a structural shift toward internalized compute, squeezing third-party AI infra players and deepening the potential re-rating beyond a single stock beat.
The panel consensus is bearish, with rising 10-year yields above 4.6% and potential Nvidia earnings disappointment driving a re-rating of growth stocks, particularly AI leaders.
Nvidia delivering strong earnings, which could temporarily unlock a re-rating of growth stocks despite elevated yields.
Nvidia's earnings guidance falling short of expectations, which could accelerate a broader rotation out of tech stocks.