Stocks drop as yields rise; Nasdaq and small caps lag, Apple gains

Risk assets sold off as rising Treasury yields and a jump in the VIX tightened financial conditions; the damage was broad, but longest-duration tech and small caps absorbed the worst of it while Apple's 3.56% gain provided a narrow offset.

• Most major indices fell with rates: the S&P 500 dropped 0.58% to 7,591.7, the Dow fell 0.6% to 52,064.1, the Nasdaq 100 declined 1.08% to 29,103.513 and the Russell 2000 slid 1.04% to 2,890.947. The decline was broad rather than concentrated, driven by rising Treasury yields; the dollar index was nearly flat at 99.04 and bitcoin fell 1.98% to 76,792.09, confirming the cautious tone.
• The VIX climbed 8.38% to 17.84, a 1.38-point rise that was larger than the S&P 500's 0.58% drop, signaling demand for downside protection. Although 17.84 remains below the 20 level, the jump confirms the tape's defensive tone and matches the fear and greed reading of 33.3, which sits in fear.
• The 10-year Treasury yield rose 12 basis points to 4.95%, while the 2-year yield rose 13 basis points to 4.56%, narrowing the 2s10s spread by one basis point to 39 basis points. That mild flattening alongside higher yields pressured equity valuations, with the Nasdaq 100 and Russell 2000 down 1.08% and 1.04% respectively.
• The CNN fear and greed index sits at 33.3 in fear territory, confirming the risk-off price action and VIX pop. The valuation gauge reads 47.7, not extreme, but with the S&P 500 6.07% above its 200-day moving average of 7,157.28, valuations have not been washed out, so the fear reading reflects flow and rate pressure more than cheapness.
• Apple was the standout gainer, up 3.56%, with Alphabet up 0.59% and Microsoft up 0.16%, while NVIDIA fell 2.26%, Meta 1.42%, Tesla 1.16% and Broadcom 0.97%. Leadership was narrow and defensive; the strongest theme was AI-hardware weakness, with chip and megacap growth names leading losses while Apple's gain kept the S&P 500 loss smaller than the Nasdaq 100's.
• Oracle's quarterly results and revenue backlog came in stronger than expected, while Dell's $95B AI server backlog is fueling the next leg of its rally, according to Evercore. Together they reinforce AI-infrastructure demand, even as listed chip names such as NVIDIA fell 2.26% and Broadcom 0.97%, highlighting a split between AI backlog optimism and current tech valuation pressure. Watch whether the backlog optimism stabilizes chip names in the next session.

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