[New York Stock Exchange] U.S. Treasury Yields Rebound in a Day... All Major Indexes Decline

Walmart Plunges on Disappointing Profit Outlook
International Oil Prices Rise Across the Board

Although the U.S. Department of the Treasury dramatically expanded its buyback program to help defend against a rise in long-term bond yields, interest rates nevertheless rose within a day, resulting in declines across all three major U.S. stock indexes in New York on August 20 (local time).

As of 10:12 a.m. on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was trading at 53,049.31, down 413.74 points, or 0.77%, from the previous session. The S&P 500 index, focused on large-cap stocks, had dropped 25.23 points, or 0.33%, to 7,682.75, while the tech-heavy Nasdaq Composite was down 168.16 points, or 0.64%, at 26,161.92.

On this day, as U.S. Treasury yields rose again, risk aversion increased among investors. The previous day, the U.S. Treasury had announced it would at least double the size of its buyback program in response to the recent surge in Treasury yields, leading to a sharp drop in rates. However, concerns have spread that the move would be limited in addressing the fundamental causes of rising long-term interest rates, which include a large fiscal deficit, inflation, and increased corporate bond supply. As a result, U.S. Treasury yields rebounded and equity markets came under downward pressure.

Michael Schumacher, former head of macro strategy at Wells Fargo, commented, “There are several reasons long-term yields are rising,” and pointed out, “U.S. fiscal deficits show little sign of improvement, and defense spending continues to rise.” He added, “This trend existed even before the escalation of tensions with Iran, and those tensions have only intensified it.”

The heightened tensions between the U.S. and Iran have also contributed to the rise in international oil prices, adding further pressure to the stock market. U.S. President Donald Trump announced on Truth Social that he would begin “the most powerful economic operation ever undertaken against any nation” targeting Iran. He added, “This will be an unprecedented economic war and an isolation policy.”

Reflecting these developments, international crude oil prices saw a sharp uptick. On the New York Mercantile Exchange (NYMEX), West Texas Intermediate (WTI) crude for September delivery was trading at $88.14 per barrel, up 2.69% from the previous session. On ICE Futures, October Brent crude was at $93.86 a barrel, up 2.44%.

By stock, Walmart was down more than 8% as its U.S. same-store sales growth fell short of expectations, and its Q3 and full-year profit outlook also disappointed.

Meanwhile, Nvidia declined 0.07%, Micron Technology was down 0.86%, Intel fell 2.10%, Meta dropped 0.32%, Microsoft decreased by 0.37%, and Alphabet slipped 0.87%. On the other hand, AMA rose 0.20%, and SK hynix ADR Boost climbed 3.36%.

According to Investing.com, the 30-year U.S. Treasury yield stood at 5.236%, up 4.2 basis points (1bp = 0.01 percentage points) from the previous session. The 10-year Treasury yield rose 3.3 basis points to 4.686%, while the 2-year Treasury yield increased by 1.3 basis points to 4.192%.

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