NEW YORK, New York - U.S. stock markets closed sharply lower on Tuesday, with the tech-heavy Nasdaq Composite leading the decline as investors rotated out of growth names amid rising bond yields and renewed concerns over the Federal Reserve's monetary policy trajectory. 

The Standard and Poor's 500 fell 54.59 points to end at 7,631.55, a drop of 0.71 percent, with trading volume reaching 2.607 billion shares. The benchmark index moved between an intraday low of 7,611.20 and a high of 7,663.63, as all 11 major sectors finished in the red. The index now sits well above its 52-week low of 6,316.91 but remains below its peak of 7,816.70.

The Dow Jones Industrial Average suffered its worst session in over a month, plummeting 418.31 points to close at 52,767.59, representing a decline of 0.79 percent. Volume on the blue-chip index totaled 390.396 million shares. The Dow traded in a range of 52,691.31 to 53,176.60 during the session, and currently stands 3.61 percent below its 52-week high of 54,744.33, though it remains firmly above its low of 44,948.16.

The NASDAQ Composite bore the brunt of Tuesday's selling pressure, tumbling 271.12 points to 26,099.77, a loss of 1.03 percent. Heavy volume of 4.991 billion shares changed hands as mega-cap technology names including Apple, Nvidia, and Microsoft came under sustained pressure. The index traded between 25,995.53 and 26,260.68 on the day, and now sits 4.01 percent below its 52-week peak of 27,190.21, though it remains well above its trough of 20,690.25.

Market strategists pointed to a confluence of factors driving Tuesday's sell-off, including a spike in 10-year Treasury yields above 4.5 percent, disappointing corporate earnings guidance from several bellwethers, and lingering anxiety over the Fed's next move following last week's hawkish signals from policymakers.

U.S. Dollar Dominates Global FX Markets on Tuesday; Indian Rupee Defies Trend to Hit Two-Month High

The U.S. dollar marched higher against all major currencies on Tuesday, extending its recent winning streak as hostilities resumed in Iran, and traders bet on a resilient American economy and higher-for-longer interest rates. However, in a notable exception, the Indian rupee emerged as the day's outlier, surging to a two-month high after aggressive intervention by the Bank of India.

The greenback's broad-based strength was evident across developed and emerging market pairs. The euro slumped against the dollar, with the EUR-USD pair trading at 1.1589, a decline of 0.25 percent as European economic data disappointed and the European Central Bank signalled growing caution over the region's growth outlook. The British pound also retreated, with GBP-USD dropping to 1.3512, down 0.27 percent, as political uncertainty and softening services activity weighed on sterling.

Against the Japanese yen, the dollar powered higher, with USD-JPY climbing to 160.25, a gain of 0.32 percent, as the interest rate differential between the U.S. and Japan continued to favour the dollar. The Australian dollar fell to 0.7145 against the greenback, losing 0.31 percent, pressured by weaker commodity prices and concerns over China's slowing demand. The USD-CAD pair rose to 1.3897, advancing 0.31 percent, as the loonie tracked lower oil prices and the Bank of Canada's dovish tilt.

The Swiss franc was no exception to the dollar's assault, with USD-CHF climbing to 0.8119, a 0.43 percent increase, even as the Swiss National Bank remains vigilant over excessive franc weakness. The pair saw no net change in its opening level but still closed firmly higher on the session.

The standout story of the day, however, came from India. Despite the dollar's global rally, the Indian rupee strengthened to a two-month high against the greenback, defying the broader trend. Traders attributed the rupee's resilience to concerted intervention by the Bank of India, which was seen selling dollars aggressively in the spot and forward markets to support the local currency. The central bank's actions caught many short-sellers off guard, triggering a sharp squeeze that pushed the rupee to its strongest level since early July.

The dollar's advance on Tuesday comes as markets brace for key U.S. inflation data later this week, which could reinforce expectations that the Federal Reserve will hold rates steady or even hike further if price pressures persist. Meanwhile, the eurozone's weakening manufacturing outlook and the UK's political flux continue to weigh on their respective currencies, leaving the dollar as the default safe-haven beneficiary.

Analysts noted that the dollar's strength was broad-based but not uniform, with the rupee's outperformance serving as a reminder that central bank intervention can still create significant distortions in otherwise one-way markets

Global Stock Markets End Mixed on Tuesday as Tech Slump Offsets Asia Gains; Trade Tensions Weigh on European Bourses

World stock markets delivered a fragmented performance on Tuesday, with Canadian, UK, and European and Asian benchmarks dragged lower by a slump in technology shares and persistent concerns over global trade restrictions, while select Southeast Asian and Middle Eastern indices managed to close in positive territory.

In London, the FTSE 100 declined by 34.98 points, settling at 10,789.28, a drop of 0.32 percent. Canadian equities suffered even steeper losses. The S&P/TSX Composite index cratered by 444.75 points to settle at 35,825.73, a sharp decline of 1.23 percent. Volume on the TSX reached 305.228 million shares as energy stocks tumbled alongside crude oil prices, while financials and miners also weighed heavily on the benchmark. The index's slide marked its worst single-day performance in several weeks.

In Europe, the sell-off was broad-based. Germany's DAX P suffered the heaviest losses among major European indexes, tumbling 288.00 points to 25,970.11, a decrease of 1.10 percent, as automakers and industrial exporters faced renewed pressure.

In France, the CAC 40 slipped 32.65 points to 8,301.85, down 0.39 percent, while the pan-European EURO STOXX 50 I fell 51.18 points to close at 6,368.98, representing a 0.80 per cent loss. The Euronext 100 Index gave up 9.28 points, ending at 1,906.03 for a decline of 0.48 percent, and Belgium's BEL 20 edged lower by 3.99 points to 5,830.29, a marginal 0.07 percent drop.

Asian trading sessions were largely negative, though with notable exceptions. Hong Kong's HANG SENG INDEX shed 237.26 points to finish at 25,329.73, a loss of 0.93 percent, as property and tech names weighed on the benchmark.

In Singapore, the STI Index dropped 44.99 points to 5,710.37, down 0.78 percent, while Australia's S&P/ASX 200 [XJO] declined 9.30 points to 9,066.70 (minus 0.10 percent), and the broader ALL ORDINARIES [XAO] fell 10.50 points to 9,260.90, a 0.11 percent retreat.

In India, the S&P BSE SENSEX was virtually flat, slipping just 12.99 points to 76,944.28, a negligible 0.02 percent drop. Japan's Nikkei 225 also retreated, closing at 66,215.34, down 96.59 points or 0.15 percent, while China's SSE Composite Index fell 6.41 points to 3,979.89, a 0.16 percent decline.

In South Korea, the  KOSPI Composite Index bucked the trend, rising 15.78 points to end at 6,835.80, a gain of 0.23 percent.

The most pronounced losses of the day came from Southeast Asia, where Malaysia's FTSE Bursa Malaysia KLCI plunged 25.34 points to 1,700.54, tumbling 1.47 percent. In New Zealand, the S&P/NZX 50 INDEX GROSS also suffered, dropping 130.40 points to 13,786.90, a decline of 0.94 percent.

However, several markets closed with robust gains. In Taiwan, the TSEC CAPITALIZATION WEIGHTED ST index surged 820.25 points to 46,948.72, an impressive rally of 1.78 percent, led by semiconductor heavyweights.

Indonesia's IDX COMPOSITE advanced 74.46 points to 6,599.94, climbing 1.14 percent, while in Israel, the TA-125 gained 27.61 points to close at 4,084.21, up 0.68 percent. Egypt's EGX 30 Price Return Index posted one of the strongest performances, rising 565.30 points to 55,431.30, a gain of 1.03 percent on volume of 376.377 million shares.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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