Dow plunges over 500 points at open as tariff worries, rising yields weigh on sentiment; Europe trades lower

US stocks opened sharply lower on Tuesday, kicking off September on a weak note as investors digested fresh tariff-related uncertainty and a surge in bond yields.

The Dow Jones Industrial Average tumbled 542 points, or 1.2%, in early trade. The S&P 500 dropped 1.2%, while the Nasdaq Composite shed 1.4%, led by weakness in technology stocks. Nvidia slipped more than 2% and Palantir fell 3%, pacing losses in Big Tech.

The declines came after a federal appeals court ruled that most of President Donald Trump’s global tariffs were unlawful, saying only Congress has the authority to impose such sweeping levies. Trump vowed to appeal the decision to the U.S. Supreme Court, raising the specter of prolonged trade uncertainty.

Bond yields added to investor jitters. The 10-year Treasury yield climbed to 4.29%, while the 30-year yield moved past 4.98%, as markets assessed the potential fiscal impact if billions in tariff revenue must be refunded.

Wall Street’s fear gauge, the CBOE Volatility Index (VIX), spiked more than 25% to 19.26 in morning trading, reflecting heightened uncertainty.

September has historically been the weakest month for equities. The S&P 500 has averaged a 4.2% drop over the past five years and has fallen more than 2% on average over the past decade, according to CFRA Research. “The market may surrender some recent gains in the near term as it awaits new catalysts,” said Sam Stovall, chief investment strategist at CFRA.

Traders are also positioning ahead of Friday’s U.S. jobs report, which will be a key input into the Federal Reserve’s upcoming policy decision.

European stocks mirrored Wall Street’s cautious mood in afternoon trade. The Stoxx 600 index was down 0.8%, with autos and tech leading declines on tariff fears. Germany’s DAX slipped 1%, France’s CAC 40 fell 0.9%, and London’s FTSE 100 lost 0.6%. Bond yields across the Eurozone edged higher in tandem with US Treasuries, while investors awaited Eurozone inflation data later this week.