Bond yields, UAE strike pressure AI tech rally

Rising global government bond yields and a drone strike that sparked a fire at a UAE nuclear plant weighed on technology stocks tied to artificial intelligence, while investors priced in a greater chance of future Federal Reserve rate hikes ahead of Nvidia’s earnings.

The drone attack occurred Monday at a nuclear facility in the United Arab Emirates and coincided with reports that Saudi Arabia intercepted three hostile drones. President Donald Trump warned that Iran must act “fast” before he stepped back from planned military strikes after appeals from Gulf allies. The strike pushed oil prices up temporarily.

Bond markets moved sharply. The U.S. 10-year Treasury yield rose above 4.50% and Japan’s 10-year government bond yield reached about 2.8%, reflecting broader increases in long-term yields. Fed funds futures priced a probability of a 25-basis-point rate rise by late 2026 or January 2027 as markets reassessed the future path of interest rates.

Equity markets registered losses. The S&P 500 and Nasdaq 100 traded lower for a second session and E-mini futures extended declines in early Asian trading. Analysts noted that higher long-term yields reduce the present value of distant earnings, affecting high-multiple growth stocks.

Some Asian technology names showed strength. Baidu reported first-quarter core AI-driven revenue up 49%, beating expectations and lifting its shares. Samsung Electronics shares rose about 3.9% as investors positioned ahead of Nvidia’s results. Broader regional indexes underperformed as higher U.S. yields and weak domestic demand in China weighed on sentiment; China’s retail sales recorded their slowest expansion since the COVID-19 pandemic.

Technical indicators on the Nasdaq 100 pointed to near-term pressure. Price action breached an ascending channel that began in March 2025, with momentum indicators below neutral. Short-term resistance sits near 29,400 points, with immediate support around 28,660 and secondary support between roughly 28,460 and 28,280.

Currency and commodity moves reflected the shift in risk appetite. The U.S. dollar index remained firm as rate-hike expectations rose. Oil climbed to a two-week high after the UAE strike before easing later in the U.S. session when tensions did not escalate into broader conflict. Spot gold fell to a 1.5-month low near $4,480 per ounce and closed the session around $4,566 per ounce.

Other scheduled releases and policy developments drew market attention. Investors monitored Japan’s preliminary Q1 GDP, Reserve Bank of Australia meeting minutes, and Canada’s April core inflation. India imposed emergency curbs on silver imports to support its capital account, and labor negotiations at Samsung continued.

Nvidia is due to report earnings on Wednesday. Markets have focused on that report ahead of corporate results and economic data this week, while market participants monitor the interaction of geopolitical events, commodity prices and central-bank signals.