Shares fall as 30-year yield hits 23-year high

(AWP Alliance News) - Shares ended lower in New York on Tuesday as the 30-year Treasury yield hit its highest level in over two decades, though oil prices sank amid hopes for a US-Iran ceasefire, ahead of key US data releases on Wednesday.

The Dow Jones Industrial Average closed down 131.59 points, 0.3%, at 51,349.92. The S&P 500 fell 12.85 points, 0.2%, to 7,670.84. The Nasdaq Composite ended down 22.84 points, 0.1%, at 26,797.54.

"Crude oil's slide...reflects growing hopes that Middle East tensions can ease, while the restoration of Saudi pipeline flows is helping offset disruption through the Strait of Hormuz. However, with US-Iran talks still uncertain and Tehran rejecting Washington's terms, the supply outlook remains highly fragile," said IG Chief Technical Analyst Axel Rudolph.

The yield on the 10-year US Treasury was at 5.25% late Tuesday, up from 5.23% on Monday. The 30-year yield rose to 5.58% from 5.55%. Earlier in the session, the long-dated bond yield sat at 5.644%, its highest level since June 2002.

A barrel of Brent fetched USD102.39 late Friday, down from USD105.57 on Monday. West Texas Intermediate fell to USD89.04 from USD92.75.

Iran's chief negotiator Mohammad Bagher Ghalibaf on Tuesday threatened new attacks, saying no infrastructure in the region would be safe if his country's security was not guaranteed, as Iran awaits an official US response to its plan to reopen the Strait of Hormuz within seven days.

"In a region where we cannot sell oil, no one else will sell oil either; or if our security is not guaranteed, no infrastructure will remain safe," Ghalibaf said.

US President Donald Trump had already dismissed the proposal from Tehran at the weekend, but Iran's Foreign Minister Abbas Araghchi said on Monday that he expected a formal response by Tuesday.

The Bureau of Labor Statistics on Tuesday said its job openings and labour turnover survey showed the total number of job openings for August was 7.1 million, compared with FXStreet-cited consensus of 7.2 million. It was down from July's total of 7.34 million, revised upwards by 64,000 from 7.27 million.

"Hires changed little at 5.2 million, while total separations were unchanged at 5.1 million," the Bureau said. "Within separations, quits (3.1 million) were unchanged, while layoffs and discharges (1.6 million) were essentially unchanged."

On Wednesday, the US Bureau of Economic Analysis releases its third estimate of second quarter GDP as well as August PCE inflation data.

Against the dollar, the euro was at USD1.1339, down from USD1.1367 on Monday. Sterling fell to USD1.3231 from USD1.3254. Against the yen, the dollar was at JPY157.33, down from JPY157.44.

Gold rose to USD4,174.9 an ounce from USD4,124.70.

AI-related stocks fell on Tuesday after OpenAI said it will not release its newest artificial intelligence model, Astra 6.1, after internal testing revealed it did not meet safety standards.

Astra 6.1 was an improvement over previous models in some aspects, but "it didn't quite meet the bar in terms of staying within scope and authorisation, and how it communicates back to the user about the type of work it's done," Saachi Jain, OpenAI's head of safety systems, said in a statement.

"We want to make sure our model development is safe no matter whether that's in the company, or when we ship it to users. But when we ship it to users, we have an extremely high bar in terms of safety and alignment," Jain continued.

Agents built with OpenAI's models have inappropriately accessed websites maintained by US federal agencies, an Australian government health statistics portal and Hugging Face, a repository of AI models.

Nvidia on Monday unveiled a system that it said could have prevented the Hugging Face breach.

More than 100 organisations are working with Nvidia's platform at launch, the company said, including Microsoft, Cisco, Salesforce and SAP. Anthropic has connected its Claude agents to the system and SpaceXAI is applying it to its Grok models.

Amid the safety concerns, key AI executives met with US President Trump on Tuesday to discuss calls for stronger industry oversight.

Microsoft closed down 0.1%. Nvidia fell 0.7%, Cisco rose 0.2%, Salesforce ended down 0.9% and SAP rose 0.7%. SpaceX jumped 2.6%.

Shell on Tuesday said it will double production capacity at the LNG Canada facility in British Columbia.

LNG Canada is a joint venture between Shell, with a 40% stake, Petronas with 25%, PetroChina Co Ltd and Mitsubishi Corp with 15% each, and Korea Gas Corp with 5%.

The oil and gas major said the second phase of the project will add two liquefied natural gas processing units, or trains, increasing total production capacity at the Kitimat facility to 28 million tonnes per annum from 14 million.

The company said the investment is expected to generate double-digit returns and support long-term cash flow growth.

Shell closed down 1.4% in New York.

Novo Nordisk on Tuesday said it had entered a USD2.6 billion licensing deal with Hengrui Pharma for GLP-1 drug RS-1596, which targets weight reduction and glycemic control, like Novo's existing drug portfolio.

Novo is paying USD300 million upfront, and owes potential royalties to Hengrui, taking the deal's potential total value to USD2.6 billion.

In exchange, Novo will hold the rights to commercialise HRS-1596 everywhere except mainland China, Hong Kong, Macao and Taiwan.

Separately on Tuesday, Novo reported that its drug Ozempic was linked to a 6% lower risk of adverse cardiovascular events in type-two diabetes patients who are already on a semaglutide treatment, when compared with switching to rival Eli Lilly & Co's medication Mounjaro.

Novo ended down 1.1% in New York. Eli Lilly eased 0.1%.

In Europe, the FTSE 100 closed down 0.5% in London, as did the CAC 40 in Paris. The DAX 40 rose 0.1% in Frankfurt.

In China, the Shanghai Composite closed up 0.2%. The Hang Seng in Hong Kong fell 0.5%. The S&P/ASX 200 ended up 0.3% in Sydney. The Nikkei 225 in Tokyo ended down 0.6%.

Wednesday's corporate calendar has earnings from Conagra Brands, Micron Technology and FactSet Research Systems.

The economic calendar has US personal consumption expenditures and GDP, alongside Japanese retail sales.

By Aidan Lane, Alliance News reporter

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