US stocks plunge at open as Treasury yields spike and inflation fears hit Wall Street AI rally

S&P and Nasdaq fell for reasons tied to yields

Wall Street opened sharply lower on Friday as inflation fears—linked to the Middle East conflict—pushed Treasury yields higher. That jump in yields threatens to derail a recent AI-fueled rally by tightening financial conditions for stocks. The S&P 500 and Nasdaq both dropped about 1% at the open, signaling risk-off sentiment returning quickly. Traders are now focused on whether higher yields persist and how markets interpret incoming inflation signals after the shock from geopolitical tensions.