Where are you located? Can they go outside? Do the cups have drainage holes?

The cups do have drainage holes, they are in the basement under grow lights. Basement temp is around 65F. I'm in Michigan, looks like we have the possibility for freezing at night next week so I'm not sure they should go out yet.

What soil do you have them in? Does it have any fertilizer in it? If not, make a very weak solution the next time you water.

Also, watermelons like it hot. Do you have a heat mat you can put under the cups?

They look fine to me. They only have the seed leaves so far and they are going to emerge at whatever color they do. It is when the first set of true leaves emerge that you might start giving them a light dose of fertilizer once a week when you water (if the potting mix doesn't contain any fert).

It seems a little early to be starting a heat lover like watermelon indoors in your location. They may be quite large by the time you can plant them out in a few weeks.

I normally direct seed all of my cucurbits (cukes, squash, melons, etc) in early May here in Missouri but starting indoors is probably not a bad idea up north. I'd wait until the soil temperatures are consistently above 60 and the nights are above 50 before planting out.

Thanks for the input! Truly appreciated. I had wondered about the indoor temps in the basement being a little to cold. I was looking at a heat mat for starting other seedlings so I may grab two. I was using an indoor soil I bought, I will check weather or not it contains fertilizer and act accordingly once they sprout true leaves. I have about a dozen of the watermelon growing. I didn't take timing into account for anything this year. New to it all (both indoor and outdoor) and learning a ton! My wife keeps telling me to stop looking at them so often and just be patient.
I should probably take her advice. Thanks for taking the time to reply to me.

Light and water problems are the common explanation for this. You said you adjusted your lights. How? You may have adjusted from one wrong setup to another. Lights should be just a few inches away from seedlings. Too much or too little water is another possibility. Drainage holes don't prevent either. Soil should be moist, but not soggy.

Seedling leaves (cotyledons) ARE basically nutrient sources for the plant. That's their function. You don't need to add fertilizer until you have real leaves.

+1 on the comments to use a heat mat, and to disregard the cotyledon color. If there are problems when the first true leaf appears, adjustments can be made at that point.

As LoneJack stated, it is pretty early to be starting cucurbits (including watermelon) in our climate. They need strong light to keep from getting leggy, so as Dan stated above, keep the lights about 1" above the plants. When healthy, they will quickly outgrow their pots... at which point they might not survive. I start watermelon in pots too (when I grow it), my recommendation would be to plant a few backups around mid-May.

Give them more light, perhaps less water. Taking seedlngs outdoors is NOT planting them but getting some good sunshine during the day.

I start melons on April 28 and plant outdoors on about May 20, 21.

The only other yellowing cause could be infected starting medium.