Equities had until recently “shrugged off the effects of higher yields”, Interactive Brokers’ Steve Sosnick said of increases in bond yields.

“After pretending this was not a problem, I think (the market) has now decided that higher yields are in fact a problem,” Sosnick said. “But we aren’t seeing panic or anything like that.”

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.8% at 49,289.53.

The broad-based S&P 500 dropped 0.4% to 7,372.49, while the tech-rich Nasdaq Composite Index shed 0.3% to 26,024.82.

Iran’s army warned on Tuesday it would “open new fronts” against the US if it resumed attacks after President Donald Trump said he had held off launching a new offensive in hopes of striking a deal.

Major US indices were also under pressure Monday as semiconductor equities sold off a fraction of recent gains. Sosnick described the dynamic as profit-taking ahead of Wednesday’s release of Nvidia’s earnings.