Wall Street Slides as Bond Yields Rebound and Geopolitical Risks Intensify

Index Update

US stocks closed lower on Thursday as rising Treasury yields, higher energy prices and Inflation concerns weighed on sentiment. The S&P 500 fell 0.9%, the Nasdaq declined 0.7% and the Dow dropped 704 points, with financial and AI-related stocks under pressure. Walmart plunged 9.1%, its steepest one-day decline in four years, after second-quarter sales missed expectations.

Market Movers

Among the top-performing stocks of the session Wetour Robotics Limited. surged 32.59%, while ARB IOT Group Limited. rallied 32.17%. On the losing side, Profusa, Inc. fell 44.22%, while IP Strategy Holdings, Inc. declined 38.04%, making them the weakest performers during the trading day.

Commodities Update

Crude oil prices extended gains on Friday, with WTI trading above $86 per barrel and Brent above $93, putting both benchmarks on track for a second consecutive weekly advance of nearly 6% and more than 5%, respectively. Prices were supported by the unresolved US-Iran conflict over the Strait of Hormuz, Washington’s planned measures to further isolate Iran’s economy, and Ukrainian strikes on Russian energy infrastructure that have caused regional fuel shortages and heightened global Supply concerns.

Gold traded above $4,500 an ounce and silver above $68 on Friday, with both metals heading for a third consecutive weekly gain amid heightened Volatility in currency and bond markets, rising inflation risks from stronger oil prices, and safe-haven demand. Prices were further supported by the US Treasury’s plan to significantly increase long-term Debt buybacks, which initially weakened the dollar and Treasury yields, alongside escalating US-Iran tensions, robust Investment Demand and continued Central Bank gold purchases, particularly from China.

Macro Updates

Dollar Weakens on Debt and Inflation Concerns

The US dollar index traded near 98.8 on Friday and was heading for a weekly decline of nearly 1%, pressured by concerns over rising government debt and volatility triggered by the Treasury’s expanded bond-buyback plan. Although long-term Treasury yields rebounded after an initial decline, doubts over the plan’s lasting effectiveness and inflation risks from higher oil prices reduced demand for the greenback.

US Mortgage Rates Ease as Natural Gas Injection Misses Forecasts

The US 30-year fixed mortgage rate edged down to 6.65% in the week ended August 20, offering modest relief to homebuyers, while the 15-year rate slipped to 5.95%. Meanwhile, natural gas inventories rose by 16 bcf to 3.169 trillion cubic feet, below market expectations and historical averages, leaving stockpiles 0.9% lower year over year but 6.2% above the five-year average.

Bonds Commentary

The 10-year US Treasury Yield traded near 4.7% on Friday, while the 30-year yield climbed to around 5.25%, as investors questioned whether expanded debt Buybacks would sustainably reduce borrowing costs. Longer-term yields remained elevated amid heavy debt issuance by AI companies, increased federal Deficit spending and inflation concerns driven by rising oil prices and escalating US sanctions against Iran.

Futures Update

US stock futures hovered near weekly lows on Friday following sharp declines in the previous session, as rebounding Treasury yields and rising oil prices intensified concerns over borrowing costs and inflation. On Thursday, the Dow fell 1.32%, the S&P 500 lost 0.87% and the Nasdaq Composite declined 1%, with most sectors closing lower. Meanwhile, Ross Stores surged more than 8% after hours following stronger-than-expected second-quarter results.

Stocks came under renewed pressure on Thursday, with the major averages extending their declines throughout the session and erasing the modest gains recorded on Wednesday. The S&P 500 maintains a neutral intraday bias, pulling back to 7,641.16 after recently approaching record highs near 7,800. Although the broader uptrend remains intact above the 63-day EMA at 7,501.96, the move below the 21-day EMA at 7,651.79 points to weakening near-term momentum. The RSI at 51.20 has returned to neutral territory, reflecting a balance between buyers and sellers and leaving room for further consolidation. Immediate support is positioned around 7,600–7,550, while resistance is seen near 7,650–7,700. A sustained move above 7,700 could restore bullish momentum and target 7,800, while a break below 7,550 could expose the index to further downside toward the 63-day EMA. Rising Treasury yields and higher oil prices are also adding to the recent pressure on equities.