[New York Stock Market] Major Indexes Close Lower as 30-Year Treasury Yield Surges

30-year U.S. Treasury Yield Hits 5.33%, Highest Since 2007

Iran Tensions and Rising Oil Prices Fuel Fresh Inflation Concerns

Semiconductor Stocks Plunge; Nasdaq Down 1.33%

On August 18 (local time), the three major U.S. stock indexes all closed lower in New York as the yield on 30-year U.S. Treasury bonds soared to its highest level in 19 years due to concerns over fiscal deficits and inflation, dampening investor sentiment toward risk assets.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 53,343.40, down 116.38 points (0.22%) from the previous session. The S&P 500 index, which focuses on large-cap stocks, fell by 53.30 points (0.69%) to 7,691.76, while the tech-heavy Nasdaq index dropped by 355.20 points (1.33%) to finish at 26,289.71.

New York Stock Exchange view. New York, USA – Photo by Yoonju Hwang

In the market on this day, the rise in U.S. long-term bond yields expanded risk-off sentiment. The yield on the 30-year U.S. Treasury soared to as high as 5.335% during the session, hitting its highest level since 2007.

Recently, negotiations between Iran and the United States have stalled, keeping international oil prices elevated. As a result, there are growing concerns that rising energy prices could reignite inflation, which is putting further upward pressure on Treasury yields, according to CNBC. The widening U.S. fiscal deficit and increased corporate bond issuance amid the AI investment boom are also cited as factors driving long-term yields higher.

Justin Onuekwusi, Chief Investment Officer (CIO) of St. James's Place, explained, "The market is signaling that inflation could become higher in the future, or at least that uncertainty is increasing," adding, "Accordingly, investors are demanding higher yields for holding long-term bonds."

Bill Fitzpatrick, a portfolio manager at Logan Capital Management, also said, "The market is ignoring challenges on the bond yield side and is focusing only on solid earnings and advancements in AI technology," remarking that, "At some point, selling pressure is likely to emerge." He continued, "It does not seem likely that the factors lifting bond yields will subside anytime soon."

Semiconductor stocks mostly declined. Micron Technology dropped 7.02%, Cisco Systems fell 1.14%, Intel was down 6.58%, TSMC declined 4.07%, SK hynix ADR fell 9.20%, and Nvidia was down 2.34%, among others.

Pawad Rajakzada of Forex.com analyzed, "With rising energy costs combining with higher long-term borrowing rates, the situation is becoming more challenging," adding, "Stock investors are finally starting to shift to a more defensive posture."

Negotiations between the United States and Iran also failed to make a breakthrough. U.S. President Donald Trump stated on Truth Social that the United States is currently "not engaging in any talks with Iran, nor are there any scheduled."

International oil prices also closed higher. On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for September delivery rose 0.52% from the previous session to $84.95 per barrel. On the ICE Futures Exchange, Brent crude for October delivery climbed 0.17% to $91.02 per barrel.

This content was produced with the assistance of AI translation services.