US stock futures extended their decline from Monday, with technology shares leading the losses as higher bond yields and elevated geopolitical tensions weighed on the mood in equities.

S&P 500 futures were down 0.5% while Nasdaq futures fell 1.1%, with tech shares leading declines so far on the day.

The retreat in broader tech sentiment will act as a distraction from key earnings from major retailers due this week. In case you missed it:

• No major US data releases but this week will feature a big test on consumer health
• Friday's US retail sales number was soft and now earnings will be another test

For now, tech shares are back under the microscope as equities come under pressure amid higher bond yields. The US 10-year yield is scaling up to 4.74% while the 30-year yield is moving up to 5.33% on the day. The latter is pushing to fresh highs not seen since 2007, as market participants continue to weigh the inflation outlook amid the situation in the Middle East. Rising long-term yields are typically a heavier drag on growth-oriented technology names, whose valuations rest more heavily on future earnings that get discounted at higher rates as borrowing costs climb. The 2007 reference point also means long-term borrowing costs are back at levels last seen just before the global financial crisis, underscoring how far the bond market has repriced.

US-Iran tensions remain heated, with Trump even threatening to bomb Oman now, saying the country is "getting in the way" of a deal. That is keeping investors on edge and stifling the mood in the equities space.

Here is how some of the more prominent names are faring in overnight trade on Wall Street:

• Sandisk -5.7%
• Western Digital -5.2%
• Seagate -4.5%
• Micron -4.2%
• Applied Materials -3.6%
• Intel -3.3%
• AMD -2.3%
• Nvidia -1.8%
• Tesla -1.4%
• Meta -0.7%
• Amazon -0.6%
• Alphabet -0.5%
• Microsoft +0.2%
• Apple +0.3%

Memory and chipmakers are taking a knock once again, and so are semiconductors. The steepest losses are clustered among the memory and storage suppliers at the top of that list — Sandisk, Western Digital, Seagate and Micron — a corner of the chip industry with a long history of sharp, supply-driven cycles and demand tied closely to the data-center buildout behind the AI trade. That circles back to the narrative that has been weighing on the AI trade for a while: bloating capital expenditure.

That continues to be the key issue, though as seen with Q2 earnings, tech firms managed to pass that test. It does not mean the issue will be going away any time soon.

All in all, it is just a minor retreat after the surging run higher in early August, and it remains to be seen whether there will be more to it in due time.