US stocks extended their losses on Tuesday as rising inflation and higher bond yields continued to pressure markets, pulling the S&P 500 down for a third consecutive session.

The broad index fell 0.7%, while the Dow Jones Industrial Average lost 322 points, or 0.6%, and the Nasdaq composite declined 0.8%.

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These moves followed mixed trading in international markets and a slight easing in oil prices amid ongoing volatility.

Bond Yields and Inflation Weigh on Sentiment

Bond yields have been climbing as inflation remains elevated, partly due to energy disruptions from the Iran war and the closure of the Strait of Hormuz.

Higher yields increase borrowing costs and put pressure on stocks, particularly technology shares that have already seen massive gains from artificial-intelligence enthusiasm.

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South Korea's Kospi fell 3.3% as technology stocks slumped, while Germany's DAX managed a modest 0.4% gain.

Nvidia Earnings in Focus

Investors are now looking ahead to Nvidia's quarterly results, due Wednesday, which could determine whether the tech rally can continue.

Nvidia shares fell 0.8% on Tuesday, acting as one of the heaviest weights on the S&P 500 due to its large market capitalization.

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Barclays strategists noted that heavy inflows into US stock funds have fueled a rapid rebound, but warned that “the pendulum could swing backwards.”

Among individual stocks, Akamai Technologies dropped 6.3% after announcing a $2.6 billion convertible note offering.

Home Depot rose 0.9% despite reporting a key retail metric that fell below projections, as CEO Ted Decker cited “greater consumer uncertainty and housing affordability pressure.”

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Overall, many large US companies have reported stronger-than-expected profits, but the bond market's disquiet continues to threaten the rally.