US open: Stocks drop at the bell as Treasury yields climb

Wall Street trading opened on Tuesday with losses across the board, ending a lengthy streak of gains as the yield on the 10-year Treasury note crept to 3.05%, its highest level since 2011, amid ongoing worries about trade talks between the US and China.

At 1520 BST, the Dow Jones Industrial Average and S&P 500 were down 0.73%, while the Nasdaq had lost 0.95% after the yield on the 10-year Treasury note moved above 3%, having hit an intra-day high of 3.07%.

Comments from US Commerce Secretary Wilbur Ross expressing confidence that the US had the upper hand in trade talks with China, claiming that the gap between the two "remains wide", did very little to help sentiment.

In economic news, the Empire State manufacturing index rose from the 15.8 recorded in April to a reading of 20.1 in May, the New York Fed said Tuesday.

The figure was considerably better the 15.5 reading expected by economists, with one analyst describing it as "solid".

A reading on US retail sales volumes for April edged past forecasts, thanks to upwards revisions to data for prior months.

US business inventories for March on the other hand came in below forecasts, falling to their lowest level since October 2017, according to the Commerce Department.

Inventories were flat in comparison to February, versus an expected 0.1% rise, while wholesale inventories rose 0.3%.

Lastly, homebuilder sentiment rose in May thanks to strong demand and a slim supply of affordable, existing homes for sale across the US.

The National Association of Home Builders sentiment index rose two points in May, one point higher than analysts had forecast. Anything above 50 is considered positive.

Aside from the data, Dallas Federal Reserve Bank President Robert Kaplan on Tuesday said he wasn't concerned with the rise in the yield on the 10-year Treasury note, but added that he was "very carefully watching the shape of the curve".

Investors were still waiting on a speech by San Francisco Fed President John Williams set for later in the day.

In corporate news, shares of Home Depot were 2.02% weaker in early trading as first-quarter earnings beat expectations, but sales were a miss.

Medical instruments-maker Agilent Technologies was 8.51% lower despite its quarterly earnings coming in line with analysts' expectations.